[ G.R. No.

23718, August 28, 1925 ]

IN THE MATTER OF THE ESTATE OF HENRY W. ELSER, DECEASED. VICENTE E.
REYES, CLAIMANT AND APPELLEE, VS. C. W. ROSENSTOCK, EXECUTOR AND
APPELLANT.

DECISION
STATEMENT
On or about April 30, 1923, the plaintiff obtained a judgment against Henry W. Elser, who was then
living, for the sum of P64,242.69, and for the foreclosure of a certain real mortgage on property in
Manila and the sale thereof to satisfy the judgment. Pending proceedings to appeal to this court from
the judgment, Elser died June 18, 1923, and in the ordinary course of business C. W. Rosenstock was
appointed as executor of his estate, and later the appeal was perfected by him as executor, and the
judgment of the lower court was affirmed by this court and the case returned to the court of its origin
for further proceedings.[1] Execution was issued, and on May 17, 1924, the mortgaged property was
sold by the sheriff of Manila at public auction for P13,000. On June 2, 1924, the sale was duly
confirmed, and no appeal was taken from the order of confirmation. The plaintiff duly applied for and
on July 25, 1924, obtained a deficiency judgment against the Elser estate for the sum of P68,700.88,
with interest at 12 per cent per annum on P64,242.69 of said sum from July 8,1924. After obtaining the
deficiency judgment, the plaintiff at once applied to the Court of First Instance for the appointment of a
committee on claims to examine and approve his claim against the Elser estate, of which the defendant
was duly notified, and to which he duly objected.

After a hearing the court appointed Jose de Guzman and P. D. Carman as commissioners.

August 29, 1924, the plaintiff, based upon his deficiency judgment, filed with the commissioners his
proof of claim, to which the defendant objected. September 19, 1924, the plaintiff's claim was allowed
in full by the commissioners, as a claim against the Elser estate, to which the defendant excepted.
December 8, 1924, the defendant filed a motion for a reconsideration, which was denied, and from an
order approving the allowance of the committee on claims, the defendant prosecutes this appeal,
assigning the following errors:

"I. The Court of First Instance erred and exceeded its jurisdiction in entering the order of August 21,
1924, reappointing the committee on claims and appraisals in the above-entitled proceeding, for the
purpose of hearing and deciding the claim of Vicente E. Reyes against the estate.

"II. The Court of First Instance erred in entering the order of November 18, 1924, declaring the appeal
of the executor from the decision of the committee allowing the claim of Vicente E. Reyes to have been
presented out of time, and ordering the executor to pay the said claim of Vicente E. Reyes out of the
funds of the estate."

JOHNS, J.:

There is no dispute about any material fact. The question presented is a legal one which involves the
construction of section 708 of the Code of Civil Procedure, which is as follows:

"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 before the committee,
and share in the general distribution of the assets of the estate; or he may foreclose his mortgage or
realize upon his security, by ordinary 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 prove his
deficiency judgment before the committee against the estate of the deceased; 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
held as security, under the direction of the court, if the court shall adjudge it to be for the best interest
of the estate that such redemption shall be made."

It is important to note that the original judgment against Elser was rendered on April 30, 1923, and that
he was living at the time it was rendered, and that he died on June 18, 1923, pending his appeal to this
court, or forty-nine days after the rendition of the judgment.

This section provides for three separate distinct proceedings. First, a creditor holding a claim against
the deceased, secured by mortgage or other collateral security, may abandon his security and prosecute
his claim before the committee and share in the general distribution of the assets of the estate; or,
second, he may foreclose his mortgage or realize upon his security, by an ordinary action in court,
making the executor or administrator a party defendant; and if there is a deficiency judgment, after the
sale of the mortgaged property, he may prove his deficiency judgment before the committee on claims
against the estate of the deceased, or, third, he may rely exclusively upon his mortgage and foreclose it
at any time, within the period of the statute of limitations, and if he relies exclusively upon the
mortgage, he shall not be admitted as a creditor of the estate, and shall not share in the distribution of
the assets of the estate.

In the instant case, the plaintiff proceeded under and fully complied with all of the requirements of the
second provision. He obtained his judgment and decree of foreclosure during the lifetime of the
deceased.

On his own motion and as executor of the estate, Rosenstock was substituted as a defendant and
prosecuted the appeal. After the judgment was affirmed, the plaintiff promptly issued an execution and
sold the property. After applying the proceeds of the sale to the satisfaction of the judgment, the
plaintiff promptly applied for and obtained a deficiency judgment. When the deficiency judgment was
obtained, the plaintiff petitioned the court to appoint a committee on claims. His petition was granted
and the committee was appointed. The plaintiff then appeared before the committee and presented his
claim based upon the deficiency judgment, and it was allowed, and the allowance of his claim was
confirmed by the court. The defendant had notice of all of such proceedings, to all of which he objected
and duly excepted. Hence, plaintiff's claim comes, squarely under the second provision of section 708
of the Code of Civil Procedure above quoted.

Defendant contends that the claim in question is a contingent claim, and that as such it should have
been presented to the original committee on claims of the estate, and that because it was not presented
it is barred.

In his brief appellant says:

"At all times prior to May 17, 1924, his deficiency judgment, his present claim, was a mere contingent
claim. The holder of a contingent claim is not a creditor and it is not known until the happening of the
contingency, that he will ever become one; the Code nowhere calls him a 'creditor;' he is merely 'a
person' who has a contingent claim (see section 746, Code of Civil Procedure). It is true that claimant-
appellee during all of 'the time previously limited' was a mortgage creditor of the estate, but as such
creditor, he elected not to surrender and prove his claim as he might have done under section 708, or to
present the possibility of his requiring a deficiency judgment, to the committee in the form of a
contingent claim. But claimant-appellee, on August 2, 1924, when he applied to the court to have the
committee recommissioned did not apply as a creditor with a mortgage credit which he had failed to
present, but he applied as the holder of a claim which had been contingent during all of 'the time
previously limited' and had not been presented as required by section 746 of the. Code of Civil
Procedure, and which had then become absolute, after the expiration of 'the time previously limited.'
There is no remedy in section 690 for a holder of a contingent claim who has not presented it before
'the time previously limited' has expired. Section 690, as we have seen, is a remedy for a 'creditor' of an
estate, who was a creditor before the expiration of 'the time previously limited;' but to have been a
creditor, he must have had a claim which he could have presented and proved, before the committee;
moreover, it must have been the same claim which he now seeks to have allowed and not a mere
contingent claim. The holder of a contingent claim is not a creditor. Therefore it must be concluded that
section 690 does not provide for recommissioning the committee to hear a contingent claim that has
become absolute. Provision for that proceeding is made in section 748 of the Code of Civil Procedure,
but a jurisdictional fact required by that section is that the contingent claim must have been presented
to the committee before the expiration of 'the time previously limited' and mentioned in the committee's
report as provided in section 746 of the Code.

"Let it be said again that before the court can have jurisdiction under section 690 to recommission the
committee, an application must be made by a creditor who was a creditor before the expiration of 'the
time previously limited,' and is a creditor at the time the application is made, by virtue of one and the
same claim. But claimant-appellee does not fit that requirement. In so far as his present claim was
concerned, he was a mere contingent claimant and therefore not a creditor of the estate, prior to the
expiration of 'the time previously limited.' "

Words & Phrases, volume 2, page 1498, says:

"A 'contingent claim' is one which has not accrued, and which is dependent on the happening of some
future event.

"A 'contingent claim,' within the rule that claims against an estate which are not contingent are barred if
not presented within a certain time, is one depending upon something thereafter to happen. Such a
claim is not contingent after the happening of the event.

"A 'contingent claim,' within Comp. St., c. 23, secs. 258 et seq., is a claim against a decedent, not
absolute or certain, but depending upon some event after the death of the testator or intestate which
may or may not happen. A subsisting demand against the estate of a deceased person which had
matured and was capable of being enforced during the lifetime of the deceased is not a contingent
claim."

Plaintiff's claim comes squarely within the last definition.

Defendant's contention that the claim of the plaintiff is a contingent one is not tenable.

In Hinlo vs. De Leon (18 Phil., 221), this court, on page 230 of the opinion, says:
" 'If there is a judgment for a deficiency continues the section above quoted, 'after the sale of the
mortgaged premises, or the property pledged, in the foreclosure or other proceeding to realize upon the
security, he may prove his deficiency judgment, before the committee against the estate of the deceased
* * * *' "

In Osorio vs. San Agustin (25 Phil., 404), this court, on page 409 of the opinion, says:

" * * * In view of the fact that the plaintiff had elected to abandon the security given him by his
mortgage and to prosecute his claim before the committee, he forfeited his right to bring an action upon
the security in another separate and distinct action. * * *"

There is a clear distinction between the facts in that and this case. In pointing out the distinction, Justice
Carson, in his concurring opinion on page 409, says:

"I concur in the disposition of this case.

"Merely to avoid possibility of misunderstanding, I think it well to point out that under the provisions
of section 708 of Act No. 190, part of which is quoted in the opinion, it would appear that in case a
creditor elects to rely upon his mortgage he may foreclose his mortgage or realize upon the security by
an ordinary 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 other property pledged in the
foreclosure or other proceeding, he may prove his deficiency judgment before the committee and to
that amount he may share in the general assets of the estate of the deceased. In other words, a creditor
holding a claim against the deceased person secured by mortgage or other collateral security may rely
upon his security and institute an ordinary action based thereon without abandoning his right to present
his claim to the committee should the security not be sufficient to pay the debt."

That is this case. The construction for which the defendant contends would nullify the second provision
of section 708 of the Code of Civil Procedure, and leave it without any legal force and effect.

The Code of Civil Procedure provides as follows:

"Sec. 689. Court to limit time for presenting claims. The court shall allow such time as the
circumstances of the case require for the creditors to present their claims to the committee for
examination and allowance; but not, in the first instance, more than twelve months, or less than six
months; and the time allowed shall be stated in the commission. The court may extend the time as
circumstances require, but not so that the whole time shall exceed eighteen months.

"Sec. 690. When time may be extended. On application of a creditor who has failed to present his
claim, if made within six months after the time previously limited, or, if a committee fails to give the
notice required by this chapter, and such application is made before the final settlement of the estate,
the court may, for cause shown, and on such terms as are equitable, renew the commission and allow
further time, not exceeding one month, for the .committee to examine such claim, in which case it shall
personally notify the parties of the time and place of hearing, and as soon as may be make the return of
their doings to the court."

The contention of the defendant that the petitioner was not a creditor within the meaning of section 690
is not tenable. Petitioner's claim was based upon a judgment rendered in a court of competent
jurisdiction forty-nine days before the death of Elser, and pending the appeal Rosenstock, as executor,
on his own motion, was made defendant as such, and the final judgment upon which the property was
sold was rendered against Rosenstock as executor of the Elser estate.

The defendant has filed an able and exhaustive brief, but has overlooked the fundamental fact that the
original judgment in this case was personally rendered against the deceased while he was still living.

The judgment of the lower court is affirmed, with costs. So ordered.

 1. [ G.R. No. 27701, July 21, 1928 ]
THE BANK OP THE PHILIPPINE ISLANDS, PLAINTIFF AND APPELLANT, VS. V.
CONCEPCION E HIJOS, INC., AND VENANCIO CONCEPCION, DEFENDANTS AND
APPELLANTS. HENRY W. ELSER, DEFENDANT AND APPELLEE.

DECISION
OSTRAND, J.:

It appears from the record that on July 6, 1921, the defendants Coneepcion executed a promissory note
in favor of the plaintiff for the sum of P342,372.64, payable on demand, and as security for payment,
deposited 700 shares of the Philippine National Bank as collateral with the plaintiff and gave it a
mortgage on 5,680 square meters of land, with improvements, situated on R. Hidalgo Street in Manila.
The defendants Concepcion defaulted in the payment of the note, and on February 3, 1922, the plaintiff
bank instituted the present foreclosure proceedings.
Shortly afterwards, Henry W. Elser entered into negotiations with the Concepcions and offered to take
over the mortgaged property and assume the mortgage debt. To this the Concepcions agreed on the
condition that they be relieved of all liability for the debt.

On March 23, 1922, Elser wrote the plaintiff bank the following letter:

"DEAR SIR: Confirming our conversation of this morning, I take pleasure in advising you that I have
made arrangements with Messrs. Puno & Concepcion to take over their property on Calle R. Hidalgo,
consisting of 5,680 square meters, including all improvements thereon, and also 700 shares in the
Philippine National Bank mortgaged to you in the total sum of P342,000, and by which arrangement I
am to be substituted in the place and stead of Messrs. Puno & Concepcion in the obligation to your
bank.

"I have present prospects of renting the entire property, and in consideration thereof I will undertake to
pay to the bank on the obligation thus undertaken by me, the sum of not less than five thousand pesos
(F5,000) monthly on the principal, together with interest every six months. I will also reduce the
mortgage not less than 25 per cent during the first year, not less than 50 per cent during the second
year, and the balance within the third year, without prejudice, however, to my right to mortgage the
property to any bonding institution or to take up the mortgage myself at any time during the three years
period mentioned above, which I expect that I may be in a position to do.

"Yours very truly,

(Sgd.) "H. W. Elser"

No answer to this letter was given by the bank, and it clearly appears from the allegations in its
amended complaint, and from the evidence, that it was unwilling to release the Concepcions from their
liability for the mortgage debt and insisted on their confessing a judgment in the foreclosure
proceedings. This the Concepcions refused to do unless the bank would agree to bid in the mortgaged
property for the full amount of the judgment.

After further conversation with the representatives of the plaintiff bank, Elser on April 21, 1922, wrote
it the following letter:
"DEAR SIRS (Attention of Mr. Zaragoza): With reference to our recent conversation regarding the R.
Hidajgo property belonging to Venancio Concepcion (Puno & Concepcion), I respectfully request that
you confirm in writing your verbal agreement that should the property in question become the property
of your bank, in the amount of P342,000 plus interest to date, that you will sell the same to me for the
same amount.

"This information is desired by the Attorneys for Venancio Concepcion, Mr. R. M. Calvo, in order to
satisfy himself that in case Messrs. Puno & Concepcion accept judgment, turning over the property to
you, that you in return will sell the property to me for the above mentioned sum, and not less than that
sum.

"Trusting you will see your way clear to furnish this confirmation, in accordance with our conversation,
we are

"Very truly,

(Sgd.) "H. W. Elser"

It must be inferred from this letter that Elser had been led to understand that the bank would bid in the
land at the foreclosure sale for the full amount of the judgment and sell it to him for the same price. It
will be readily seen that this proposition is entirely different from that contained in the letter of March
23d.

The plaintiff made no direct reply to the letter of April 21st, but Calvo, testifying for the plaintiff, stated
that on April 28, Elser invited him to a conference with Nolting, the president of the bank, in regard to
the matter; that on meeting Nolting, Elser said: "Mr. Nolting, do you still adhere to your acceptation of
the offer I have made you in writing?" to which Nolting answered that he did not think there was any
reason for him to go back on his word. He thereupon referred Elser and Calvo to Zaragoza, who in
some matters appears to have acted as counsel for the bank, for further conferences. The negotiations
did not lead to any action on the part of the bank, but on May 5, 1922, Elser entered into an agreement,
in the form of a bilateral deed of sale, with V. Concepcion & Hijos, Inc., and Venancio Concepcion
which appears in the record as Exhibit C and reads as follows in translation from Spanish:

"DEED OF PURCHASE AND SALE

"This deed of purchase and sale executed in the City of Manila, P. I., this fifth day of May 1922 A. D.,
by and between V. Concepcion & Hijos, Inc., a domestic corporation duly organized under the laws of
the Philippine Islands domiciled at No. 861 Calle R. Hidalgo, District of Quiapo, City of Manila,
represented herein by its president, Mr. Venancio Concepcion, by virtue of the powers granted him by
the Board of Directors of said corporation in a resolution dated May 2, 1922, a copy of which duly
certified, is attached hereto and made a part hereof, and Mr. Venancio Concepcion, of age, married with
Mrs. Rosario San Agustin and resident of the City of Manila, his place of residence being in the
municipality of San Juan, Province of Rizal, P. I., as party of the first part, and Mr. Henry W. Elser, of
age, married with Mrs. Elaine Childs Elser, and resident of the City of Manila, with her place of
residence at No. 600 Calle M. H. del Pilar, District of Malate, as party of the second part.

"WITNESSETH:
"Whereas, V. Concepcion e Hijos, Inc., is at present indebted to the Bank of the Philippine Islands, in
the sum of P342,372.64, Philippine currency with interest thereon at the rate of 9 per cent per annum
from September 30, 1921, to secure the payment of which, the firm of V. Concepcion e Hijos, Inc., and
Mr. Venancio Ooncepcion as joint and several obligors, have executed in favor of the creditor bank on
the 6th of July, 1921, a deed of mortgage and one of pledge upon the following properties:

"A tract of land with the buildings of strong materials erected thereon, situated on Calle San Sebastian,
District of Quiapo. Bounded on the N. by Calle San Sebastian; on the E. by property of Maximino
Paterno and Manuel Zamora; on the S. by property of the City of Manila; and on the W. by the Estero
de Curtidor; containing an area of 5,686.30 square meters, more or less, of which land, buildings and
improvements, the aforesaid Venancio Concepcion is the registered owner in accordance with the Land
Registration Act, according to transfer certificate of title No. 14019, issued by the registrar of deeds of
the City of Manila.

"Seven hundred shares of stock of the Philippine National Bank, belonging to Mr. Venancio
Concepcion, issued to him and indorsed in blank in favor of the Bank of the Philippine Islands,
described as follows: (Here follows the numbers and amounts of the certificates of shares.)

"Whereas on January 20, 1922, Mr. Venancio Concepcion, owner of the property above described, in
consideration of the fact that they were subject to the payment of the sum of P342,372.64 with interest
thereon at the rate of 9 per cent per annum, which was owing from V. Concepcion e Hijos, Inc., to the
Bank of the Philippine Islands, as per deeds of mortgage and of pledge executed on July 6, 1921, has
sold, assigned, and transferred to said firm of V. Concepcion e Hijos, Inc., the aforesaid properties for
the sum of P290,000 Philippine currency, the agreed and stipulated price of the urban property being
P220,000, Philippine currency, and that of the 700 shares of stock of the Philippine National Bank, the
sum of P70,000 Philippine currency, as per public document executed on said date before Mr. Recaredo
Ma. Calvo, a notary public in and for the City of Manila.

"Whereas, on February 8,1922 the Bank of the Philippine Islands, filed with the clerk's office of the
Court of First Instance of Manila, under No. 21537, a complaint, against V. Concepcion e Hijos, Inc.,
and Venancio Concepcion for the recovery of its mortgage credit evidenced by the deeds of mortgage
and of pledge executed on July 6, 1921, notwithstanding the offer made by V. Concepcion e Hijos, Inc.,
to assign absolutely and forever to said creditor entity the properties which are the subject matter of the
mortgage and pledge in full and total payment of their obligation.

"Whereas, Mr. Henry W. Elser is willing to subrogate himself to the obligation of V. Concepcion e
Hijos, Inc., and Venancio Concepcion in favor of the Bank of the Philippine Islands and release them
from the total of said obligation contracted by them on July 6, 1921, as per deeds of mortgage and of
pledge executed on said date, in consideration of the sale, assignment and transfer in his favor of all the
rights, interests, action, or share that they have or may have upon the properties described in said deeds
of mortgage and pledge;

"Now therefore, we, V. Concepcion e Hijos, Inc., and Venancio Concepcion, in consideration of the
sum of one peso (P1) Philippine currency, which we have this day received and which we declare was
paid to us to our complete satisfaction, and of other important considerations, especially the
subrogation into our joint and several obligations in favor of the Bank of the Philippine Islands,
amounting to P342,372.64, Philippine currency, with interest thereon at the rate of 9 per cent per
annum from September 30, 1921, which said Mr. Henry W. Elser hereby makes, binding himself,
moreover, to release us from our obligation contracted in favor of the Bank of the Philippine Islands on
July 6, 1921, do hereby sell, assign and transfer absolutely and forever to said Mr. Henry W. Elser, his
heirs and successors in interest the properties described herein with the incumbrances created and
existing in favor of the Bank of the Philippine Islands.

"That I, Henry W. Elser, accept this contract upon the precise terms in which it is executed.

"In testimony whereof, we sign these presents in the place and on the date above-mentioned.

"V. CONCEPCION E HIJOS, INC.

(Sgd.) "V. CONCEPCION

(Sgd.) "V. Concepcion

(Sgd.) "H. W. ELSER

"Signed in the presence of:

(Sgd.) "ERNESTO Ma. CALVO

"GREGORIO BUHAY "

The bank never gave notice of its conformity with the agreement above quoted but on June 15, 1922, it
petitioned the court to include Henry W. Elser as a defendant in the complaint, on the strength of the
obligations assumed by him in said agreement.

On June 23, 1922, the defendants Concepcion answered said petition praying that instead of merely
being included, said Elser be substituted in their place as defendants, on the ground that the plaintiff
had accepted the substitution of Elser in their place as its debtor.

On June 27, 1922, the trial court entered an order including Henry W. Elser as defendant and one
month later, the plaintiff filed an amended complaint against the defendants Concepcion and Elser
asking for a joint and several judgment against them in the amount prayed for in the original complaint
and for the foreclosure of the mortgage securing the same.

On July 18, 1922, the defendants Concepcion filed a supplemental answer alleging the consent of the
plaintiff to the subrogation of Elser in their place with respect to the obligations sued upon and asking
for the dismissal of the case as to them on that ground.

On October 16, 1922, the defendant Elser demurred to the amended complaint on the ground that it
failed to allege that the plaintiff had consented to the substitution of Elser in place of the Concepcions
so as to render Elser personally liable to the plaintiff. This demurrer was sustained by the court and due
exception was taken by the plaintiff.

On November 1, 1922, the plaintiff presented a second amended complaint, in which it was alleged that
the sale from the Concepcions to Elser was with the knowledge and consent of the plaintiff but without
waiver of its right of action against the Concepcions. The defendant Elser demurred on the ground that
it did not appear from the amended complaint that the plaintiff had accepted Elser as a debtor and on
the further ground that there was no showing therein as to the disposition of the collateral security held
by plaintiff for the same debt. This demurrer was sustained on both grounds, on December 1, 1922.
On December 6, 1922, the plaintiff presented its third amended complaint, without material change in
the averments of the second amended complaint, and a third demurrer thereto was sustained on
December 28, 1922.

The plaintiff thereupon filed a fourth amended complaint, reiterating the allegations of the third
amended complaint, alleging that the defendant Elser entered into possession of the mortgaged
premises with plaintiff's Consent; that plaintiff had not sold the shares of the Philippine National Bank
held by it as collateral, and asking for judgment decreeing that said shares and the mortgaged property
be sold under order of the court, and that the defendants Concepcion and Elser be condemned to pay
the deficiency, if any there should be. A demurrer to this complaint was sustained, on the ground that it
failed to show a contractual relationship between the plaintiff and the defendant Elser.

On March 2, 1923, the plaintiff presented a fifth amended complaint, similar to the foregoing, but
containing the additional allegation that the plaintiff accepted the assumption of the mortgage by the
defendant Elser "without releasing the liability of the defendants" Concepcion. This complaint was
demurred to on the ground that it did not sufficiently state that the plaintiff had accepted the
substitution of Elser in place of the Concepcions, as the contract between them provided. The demurrer
was overruled and the defendant Elser excepted.

On April 2, 1923, the defendant Elser answered, denying generally and specifically the allegations of
the plaintiff's complaint On the same date, C. W. Rosenstock, as guardian of the defendant, Henry W.
Elser, filed a cross-complaint alleging that at the time Elser is alleged to have assumed the obligations
of the Concepcions to the plaintiff, he was of unsound mind and that he had been induced to sign the
same by false representations on the part of the Concepcions to the effect that the plaintiff had agreed
that he be substituted in place of the Concepcions with respect to the obligations set up in the plaintiff's
complaint and that the plaintiff would accept payment of the same in monthly installments on account
of the principal of not less than P5,000, with interest payable every six months, and that the mortgage
would be reduced not less than 25 per cent the first year, not less than 50 per cent the second year, and
the balance within the third year, when, as a matter of fact, the plaintiff had not agreed thereto or
accepted said terms of payment, as the Concepcions well knew, and had never accepted Elser's offer to
the plaintiff made pursuant to said representations, and praying for the reasons stated, that the deed
from the Concepcions to Elser, wherein he assumed the obligations of the former to the plaintiff, be
cancelled. These allegations were denied by the plaintiff and the defendants Concepcion in their
replies. :

Elser died on June 18, 1923, and on January 4, 1924, the plaintiff suggested the death of the defendant
Elser, and asked that the administrator of the estate, C. W. Rosenstock, be substituted in his place as
defendant, and that the action be continued against Rosenstock in that capacity, on the ground that this
action is for the foreclosure of a mortgage.

On January 11, 1924, the attorneys of record for the defendant Elser filed an opposition to the
application to have the action continued against Rosenstock, in substitution of Elser, on the ground that,
as to Elser, this is not a foreclosure action, and hence this action, as to him, abated by reason of his
death, and any claim of the plaintiff against him should be presented to the committee on claims and
appraisals of his estate.

This objection was overruled and Rosenstock, as Elser's administrator, was substituted in his place as
defendant, by order of the court dated January 14, 1924, and exception thereto was duly taken.
Subsequently, Rosenstock became the executor of Elser's estate, and as such, filed various amended
answers and cross-complaints.

The last amended cross-complaint was filed by him on August 9, 1924, in case No. 24485 of the Court
of First Instance of Manila, in which the estate of the deceased Elser was being administered. He
repeated therein the allegations and prayer of his cross-complaint as guardian filed on April 2, 1923,
and referred to above. The last amended answer was filed by him on August 21, 1925. It consisted of a
denial of the allegations of the complaint and of the authenticity of the document whereby Elser is
alleged to have assumed the obligations of the defendants Concepcion to the plaintiff; an allegation that
at the time of the execution thereof, Elser was of unsound mind; and a statement of willingness to
relinquish and abandon any rights Elser might have acquired under said document in favor of the
plaintiff.

After a lengthy trial, the court below, on January 22, 1927, rendered its decision absolving the Elser
estate from the complaint, ordering the Concepcions to pay the plaintiff the sum of P342,372.64, with
interest at 9 per cent and costs, and providing for the sale of the mortgaged property, in case of non-
payment of the judgment.

Both the plaintiff and the defendants Concepcion excepted to this judgment and moved for a new trial
on the usual statutory grounds. The motions were denied and exceptions noted.

The case is now before this court on a joint bill of exceptions presented by the plaintiff and the
defendants Concepcion pursuant to stipulation. No briefs have been filed by the Concepcions.

From the facts stated and from the pleadings it will be readily seen that as far as the defendant Elser is
concerned, the plaintiff's alleged cause of action rests exclusively on the deed of contract Exhibit C.
The well-known general rule is that a contract affects only the parties and privies thereto. But there are
exceptions to this rule and the plaintiff contends that though it is neither a party nor a privy to the
contract here in question, the subrogation of Elser to the obligations of the Concepcions in favor of the
plaintiff, as provided for in the contract, is a stipulation pour autrui upon which the plaintiff may
maintain its action.

The nature and reach of the doctrine of stipulations pour autrui is so thoroughly discussed in the case of
Uy Tarn and Uy Yet vs. Leonard (30 Phil., 471), that no further discussion thereof is here necessary. We
wish, however, to emphasize the fact that it was there held that in order to constitute a valid stipulation
pour autrui it must be the purpose and intent of the stipulating parties to benefit the third person and
that it is not sufficient that the third person may be incidentally benefited by the stipulation. This
conclusion is supported by numerous authorities and is in complete harmony with the second paragraph
of article 1257 of the Civil Code, which reads as follows:

"Should the contract contain any stipulation in favor of a third person, he may demand its fulfillment,
provided he has given notice of his acceptance to the person bound before the stipulation has been
revoked."

Applying this test, it seems clear that neither Exhibit C nor any other agreement between the
Concepcions and Elser contained any stipulation pour autrui in favor of the plaintiff. As stated in the
appellee's brief:
The Concepcions owed the plaintiff a large sum of money and wanted to be relieved of that obligation.
Elser wanted the property which had been mortgaged to secure that obligation, and had to assume the
obligation and agree to secure the discharge of the Concepcions therefrom, in order to get the property.
Neither of them had any desire to confer any benefit to the bank. Neither of them entered into the
contract for the sake of the bank. It is obvious that each entered into the contract impelled by the
advantage accruing to him personally as a result thereof."

We may add that the stipulation here in question is not merely for the assumption of the mortgage debt
by Elser, but is a provision for the subrogation of Elser to the Concepcions obligation to the plaintiff.
Inasmuch as the mere assumption of the mortgage debt by the purchaser of mortgaged land does not
relieve the mortgagor from his liability, it might be said with some show of reason that by such an
arrangement the mortgagee will have two debtors for the same debt instead of only one and that this
furnishes additional security and is to the creditor's advantage and for his benefit. But such is not the
case where, as here, the stipulation is for the subrogation of the purchaser to the obligation of the
original debtor; if such a stipulation is duly accepted by the creditor, it works a novation of the original
agreement and releases the original debtor from further liability. Such subrogation is rarely for the
benefit of the creditor and that, in the present case, it was not believed to be of any advantage to the
bank is well shown by the fact that the parties were unable to obtain its written consent to the
stipulation.

But assuming that the stipulation is for the benefit of a third person, the plaintiff is nevertheless not in
position to maintain its action against Elser. In order to be enforceable, such stipulations must be
accepted by the third person and that has not been done here. The plaintiff asserts that it accepted the
stipulation in part, but that is not a sufficient acceptance. The ordinary rules of offer and acceptance are
applicable, and it is a cardinal rule of the law of contracts that in order to create a binding agreement,
the acceptance must be absolute, unconditional, and identical with the terms of the offer; otherwise
there is no meeting of the minds or an expression of one and the same common intention, one of the
essential elements of a valid contract (Civil Code, art. 1257; Page on Contracts, sec. 1308, and
authorities there cited).

But the plaintiff argues that in American jurisprudence, the purchaser of mortgaged property who
assumes the payment of the mortgage debt, may for that reason alone be sued for the debt by the
creditor and that that rule is applicable in this jurisdiction. Aside from the fact we are not here dealing
with a mere assumption of the debt, but with a subrogation, it may be noted that this court has already
held that the American doctrine in this respect is not in harmony with the spirit of our legislation and
has not been adopted in this country. In the case of E. C. McCullough & Co. vs. Veloso and Serna (46
Phil., 1), the court, speaking through its present Chief Justice, said:

"The effects of a transfer of a mortgaged property to a third person are well determined by the Civil
Code. According to article 1879 of this Code, the creditor may demand of the third person in
possession of the property mortgaged payment of such part of the debt, as is secured by the property in
his possession, in the manner and form established by the law. The Mortgage Law in force at the
promulgation of the Civil Code and referred to in the latter, exacted, among other conditions, also the
circumstance that after judicial or notarial demand, the original debtor had failed to make payment of
the debt at maturity. (Art 135 of the Mortgage Law of the Philippines of 1889.) According to this, the
obligation of the new possessor to pay the debt originated only from the right of the creditor to demand
payment of him, it being necessary that a demand for payment should have previously been made upon
the debtor and the latter should have failed to pay. And even if these requirements were complied with,
still the third possessor might abandon the property mortgaged, and in that case it is considered to be in
the possession of the debtor. (Art. 136 of the same law.) This clearly shows that the spirit of the Civil
Code is to let the obligation of the debtor to pay the debt stand although the property mortgaged to
secure the payment of said debt may have been transferred to a third person. While the Mortgage Law
of 1893 eliminated these provisions, it contained nothing indicating any change in the spirit of the law
in this respect. Article 129 of this law, which provides for the substitution of the debtor by the third
person in possession of the property, for the purposes of the giving of notice, does not show this change
and has reference to a case where the action is directed only against the property burdened with the
mortgage. (Art. 168 of the Regulation.)"

From what we have said it follows that the plaintiff can have no cause of action against Elser, or rather
against his estate. Assuming that Elser was of sound mind at the time of the execution of Exhibit C and
that is a much debated question the Concepcions, and not the plaintiff, might have maintained an action
against the Elser estate; but that action is now barred through their failure to present their claim in time
to the committee of claims and appraisal in the probate proceedings, and the plaintiff can therefore, not
successfully invoke article 1111 of the Civil Code, which in effect provides that after exhausting the
property of which the debtor may be in possession, the creditor may have recourse to the debtor's
credits and choses in action for the collection of the unpaid portion of the debt.

Counsel for the appellee also argue, that the bank, having failed to present its claim to the committee on
claims and appraisal, it must be regarded as having elected to rely on its mortgage alone and therefore
can have no personal judgment against the Elser estate. That is good law. Section 708 of the Code of
Civil Procedure provides as follows:

"SEC. 708. 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 before the
committee, and share in the general distribution of the assets of the estate; or he may foreclose his
mortgage or realize upon his security, by ordinary 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
prove his deficiency judgment before the committee against the estate of the deceased; 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; * * * "

As will be seen, the mortgagee has the election of one out of three courses: (1) He may abandon his
security and share in the general distribution of the assets of the estate, or (2) he may foreclose, secure
a deficiency judgment and prove his deficiency judgment before the committee, or (3) he may rely
upon his security alone, in which case he can receive no share in the distribution of the assets of the
estate.

In this case the bank did not abandon the security and took no steps of any sort before the committee
within the time limit provided for by sections 689 and 690 of the Code of Civil Procedure. The
committee ceased to function long ago, and the bank has now nothing to rely on except the mortgage.
Intentionally or not, it has brought itself within the third course provided for in section 708; it has no
alternative.

But counsel for the plaintiff say that the amount of the deficiency, if any, could not be proved before the
foreclosure sale had been effected; that section 708 expressly provides for the proof of the deficiency
judgment before the committee after the sale of the mortgaged property; that these provisions must be
construed to mean that the presentation and prosecution of the claim for the deficiency must be made
after, and not before, the sale; and that if the mortgagee presents his claim for the deficiency before a
deficiency judgment has been rendered, he will lose his rights under the mortgage and be regarded as
having abandoned his security.

This is clearly a misconception of the statute, and the cases cited by the appellant in support of its
contention are not in point. Until the foreclosure sale is made, the demand for the payment of the
deficiency is a contingent claim within the meaning of sections 746, 747, and 748 of the Code of Civil
Procedure, which sections read as follows:

"SEC. 746. Claims may be presented to committee. If a person is liable as surety for the deceased, or
has other contingent claims against his estate which cannot be proved as a debt before the committee,
the same may be presented with the proof, to the committee, who shall state in their report that such
claim was presented to them.

"SEC. 747. Estate to be retained to meet claims. If the court is satisfied from the report of the
committee, or from proofs exhibited to it, that such contingent claim is valid, it may order the executor
or administrator to retain in his hands sufficient estate to pay such contingent claim, when the same
becomes absolute, or, if the estate is insolvent, sufficient to pay a portion equal to the dividend of the
other creditors.

"SEC. 748. Claim becoming absolute in two years, how allowed. If such contingent claim becomes
absolute and is presented to the court, or to the executor or administrator, within two 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 before the committee already
appointed, or before others to be appointed, for that purpose, as if presented for allowance before the
committee had made its report."

These sections are in entire harmony with section 708; the amount of the deficiency cannot be
ascertained or proven until the foreclosure proceedings have terminated, but the claim for the
deficiency must be presented to the committee within the period fixed by sections 689 and 690 of the
Code. The committee does not then pass upon the validity of the claim but reports it to the court. If the
court "from the report of the committee" or from "the proofs exhibited to it" is satisfied that the
contingent claim is valid, the executor or administrator may be required to retain in his possession
sufficient assets to pay the claim when it becomes absolute, or enough to pay the creditor his
proportionate share if the assets of the estate are insufficient to pay the debts. When the contingent
claim has become absolute, its amount may be ascertained and established in the manner indicated by
sections 748 and 749. As will be seen, the bank both could and should have presented its claim to the
committee within the time prescribed by the law. The concurring opinion of Justices Malcolm and
Fisher in the case of Jaucian vs. Querol (38 Phil., 707), contains a very lucid exposition of the law on
the subject and further comment is therefore unnecessary.

The appeal is without merit and the judgment of the court below is affirmed with the costs against the
plaintiffappellant. So ordered.
[ G.R. No. 4232, November 07, 1908 ]
FELIX BAUTISTA, PLAINTIFF AND APPELLEE, VS. AQUILINA TIONGSON ET AL.,
DEFENDANTS AND APPELLANTS.

DECISION
TORRES, J.:

By an amended written complaint dated the 29th of October, 1904, Felix Bautista, administrator of the
intestate estate of Ciriaco Tiongson, alleged: that the said deceased Ciriaco Tiongson, and Aquilina
Tiongson, were, until the 22d of July, 1901, when the first named died, the owners pro indiviso of five
parcels of land, one of them situated in the place named Tinapayong or Catulinan, in the town of
Baliuag, and the other four in Sapang Malaqui, Sapang Munti, Sapang Bagbag and Maysasa, within
the municipality of Hagonoy, and all of them in the Province of Bulacan, their area, location and
boundaries being described in the said complaint; that one-half of the. said land appertained to said
intestate estate, and the other half to the defendant, Aquilina Tiongson; the latter and her husband,
Domingo Tomacruz, were the only parties who had administered and were then administering the
aforesaid property, having collected the rentals thereof without rendering an accounting of their
administration to anyone; and that at that time the said property was not encumbered in favor of any
other person; therefore, he prayed the court to order that the same be partitioned in accordance with
the law, and that the defendants be instructed to render an accounting of their administration and
deliver the balance, if any there be, to the plaintiff.

In view of the foregoing amended complaint, the defendants reproduced their previous answer, wherein
it was set forth that they denied the first paragraph of the complaint, for the reason that, at the time of
the death of Ciriaco Tiongson, the only plot of land held jointly by the latter and by Aquilina Tiongson
was the first of those described in the complaint, because the four remaining, the second, third, fourth,
and fifth, were owned exclusively by the defendants who had purchased the same from the late
Ciriaco Tiongson, in ignorance of the existence of plot No. 6; that they denied the allegation in
paragraph 2 of the complaint for the same reason given in reference to paragraph 1, and also the
allegation in paragraph 4, inasmuch as Ciriaco Tiongson, while living, together with the defendants,
administered the undivided lands, and that, after his death, his widow, Marciana de Zulueta, as the
administoatrix of the property of her seven minor children, received that portion of the crops from the
land described in paragraph 1 of the complaint belonging to the intestate estate until the year 1903.

As a special defense they alleged; that the plaintiff lacked the capacity to bring this action because the
legal administration of the property of the late Ciriaco Tiongson pertained to his widow who lived with
her minor children, acting on behalf of the latter; that, besides the rentals received by the widow of
Ciriaco, she, on several occasions, took from the defendants, on account of the rentals of the said land,
the sum of 1,402.45 pesos, and that the deceased, before his death, personally owed the defendants the
sum of 143.75 pesos; for which reasons they prayed that the appointment of the administrator of the
intestate estate of Ciriaco Tiongson be annulled, and that the complaint be dismissed entirely; and, in
the event that the said nullity be not declared, that they be absolved from the complaint except in so far
as it relates to the partition of the land described in paragraph 1 thereof, without prejudice to their
claim against the property of the intestate for the amounts taken by the late Ciriaco and his widow,
with the costs against the plaintiff.

By a writing dated the 31st of October, 1904, Benito Mojica, with permission of the court, presented a
petition of intervention, alleging that he was an owner by virtue of a contract of sale with a pacto de
retro clause, entered into with the spouses Domingo Tomacruz and Aquilina Tiongson for a period of
three years from November, 1902, of four parcels of rice land situated in Sapang Malaqui, Sapang
Munti, Sapang Bagbag, and Maysasa, in the municipality of Hagonoy, the area, location and
boundaries of which are stated; and having been informed that the plaintiff, Felix Bautista, had filed
a complaint against the said parties demanding the partition of the property and that it be placed in the
hands of a trustee, the said administrator Bautista being aware of the sale with right of redemption, he
prayed that, after due process of law, the Request for partition be denied with costs.

The case was tried and evidence adduced by the parties whose exhibits were made of record. The court
below entered judgment on the 4th of April, 1907, and allowed the demand interposed by Felix Bautista
as administrator Of the: intestate estate of Ciriaco Tiongson, and, in consequence decreed the partition
of the property described in the amended complaint, and at the beginning of the judgment, on the basis
that one-half of the said property belonged to Aquilina Tiongson, and the other half to the intestate
estate of Ciriaco Tiongson, as property inherited by the latter and by the said Aquilina from their late
father, Emeterio Tiongson, further ordered that Domingo Tomacruz should render an accounting of the
administration of said property within a period of fifty days. The petition for intervention presented by
Benito Mojica against Felix Bautista with respect to the rice lands in Sapang Malaqui, Sapang Munti,
Sapang Bagbag, and Sapang Maysasa, above referred to, was dismissed without special ruling as to
costs.

The defendants and the intervener, upon being informed of the foregoing decision, excepted thereto and
made known their intention to appeal therefrom by a bill of exceptions, and presented a motion tor a
new trial because the evidence did not sufficiently justify the decision, and because the same was
contrary to law. The motion for a new trial was overruled ; thereupon the defendants and the intervener
excepted to the last ruling in due course, and the said intervener agreed in writing to the bill of
exceptions presented by the defendants, and made it his own for the purposes of his appeal to this court

The proceedings instituted by Felix Bautista as administrator of the intestate estate of Ciriaco Tiongson,
wherein he asks for the partition of certain lands which the said deceased and his sister, Aquilina
Tiongson, inherited from their late father, Emeterio Tiongson, and which they possessed pro indiviso,
are governed by sections 181 to 196 of the Code of Civil Procedure.

No provision of the said sections authorizes an administrator of the property of an intestate to bring an
action demanding the partition of real estate owned pro indiviso by the deceased, whose property he is
administering, and by another person.

In the above cited sections, the law refers to a coparcener, coheir, or other person interested in the
undivided property held, because any one of such persons is a real party concerned in the partition. In
cases like the present, where the property is held by a person, not as a coheir but as the exclusive
owner, the right of action for partition, which supposes joint ownership or community of property,
pertains only to the heirs of the late Ciriaco Tiongson, not to the administrator who, when claiming the
division of real estate not included in the inventory, or which he did not take charge of on
commencing to exercise office, but which is alleged to belong to the estate, is not authorized to
represent the intestate succession of the property administered by him; neither is he authorized to
represent the heirs, because the latter, as successors to the deceased, are the only parties who may
maintain such an action for partition of real estate held pro indiviso by coheirs or owners in common.
The matter should be decided in accordance with the provisions contained in the first part of the Code
of Civil Procedure.
Only in the event that one of the parties in interest were a minor, could he be represented by his
guardian, tutor or curator ad litem, with the court's approval, to institute an action for the partition of
property or appear therein, under the provisions of section 195 of the said code.

It is to be noted that in dealing with the partition of property, the law mentions the personality of the
guardian or curator who represents a minor, but no mention is made of the executor or administrator,
inasmuch as the partition of property which, as a matter of fact, does not form a part of the inheritance,
can not be regulated by the sections of the Code of Procedure which refer to special proceedings in
connection with testate or intestate estates, but by those of the chapter on partition of real property.

With regard to the rendering of accounts, the demand therefor presupposes that the action for partition
brought by the administrator was in accordance with the law and that the same could be granted by the
court below; once the latter is dismissed, it follows that the former should likewise be denied.

Therefore, it is our opinion that the judgment appealed from should be and is hereby reversed, and that
the administrator of the intestate estate of Ciriaco Tiongson has no right to bring an action claiming the
partition of real estate on the ground that one moiety of the same belongs to the estate of the deceased.
No special ruling is made as to the costs in either instance. So ordered.
[ G.R. No. 7075, March 25, 1912 ]
RODRIGO ALBANO, ADMINISTRATOR OF THE ESTATE OF THE DECEASED SILVERIO
AGTARAP, PLAINTIFF AND APPELLEE, VS. CORNELIO AGTARAP ET AL., PLAINTIFFS
AND APPELLANTS.

ARELLANO, C.J.:

Lucio Agtarap owned several parcels of agricultural land in Laoag, Province of Ilocos Norte, and at his
death left four sons, one of whom, Silverio, died on the 10th of September, 1907.

Upon the death of Silverio Agtarap, his widow, Juana Domingo, began special proceedings for
settlement of the intestate estate of her deceased husband by petitioning for an administrator and
Rodrigo Albano was appointed.

As such administrator Rodrigo Albano instituted a civil action improperly entitled "in the matter of the
claim for the widow's legal portion" against the other three heirs of Lucio Agtarap, who are two sons of
his, called Cornelio and Nicolas and a grandson named Melecio Agtarap; improperly so entitled,
because in the present civil action the matter involved is a claim in favor of the intestate estate to
certain property belonging to the decedent, against the three heirs of the said Lucio.Agtarap, who have
taken to themselves all the estate left by the latter, including the fourth part which belongs to Silverio
Agtarap, likewise a son of Lucio Agtarap. Therefore the subject matter of this action can only be this
coSwnership, if it exists, in which the hereditary estate was left, and, if it does so exist, the partition of
the property among the four lawful coowners, the heirs of Lucio Agtarap, and withdrawal of Silverio's
portion in order to transfer it to his intestate estate.

According to law, one-fourth of this property belongs to Silverio Agtarap.

The judgment of the court below directs:

"That one-fourth part of this property be delivered to the administrator of the intestate estate of the late
Silverio Agtarap, as his legacy, so that, after proper proceedings, their respective portions may be
adjudicated to the widow and other heirs of the said Silverio; without special finding as to costs."

This judgment is entirely in accordance with law. The plaintiff also asked for the portion of the
products of the coownership corresponding to Silverio Agtarap, but the trial court ignored this request,
as well as that for some cattle included in the complaint, and the plaintiff has not appealed with regard
to this omission, so it need not be considered here. The judgment rightly says that after the proper
proceed- ings under the law, there may be adjudicated to the widow and other heirs of Silverio Agtarap,
in due -proportion, the fourth part which the defendants should deliver to the administrator of the
intestate estate of the said Silverio Agtarap; but not in this action. The necessary procedure will be the
special proceedings in the intestate estate of Silverio Agtarap, in which may properly be presented the
claim of the administrator of the said intestate estate on behalf of Juana Domingo for her "legal portion
as widow," as well as the proceedings for proving that Eugenia Agtarap is a legitimate daughter in
order to have her declared the sole heir of the whole of the said fourth part of the property which
corresponds to him whom she calls her legitimate father. In the trial held for such purpose it will be de-
termined who are the heirs of the intestate estate of Silerio Agtarap; whether she who calls herself his
legitimate daughter, Eugenia Agtarap; or his brothers Cornelio and Nicolas and his nephew Melecio, all
surnamed Agtarap.
The lawful usufruct pertaining to the widow will depend upon whether the alleged daughter or the
brothers and nephew of the deceased are entitled to the inheritance, for if she who claims to be the
daughter, Eugenia Agtarap, be declared the sole heir of the deceased Silverio Agtarap, the widow's
share would be different from what it would if the defendants in this case, as brothers and nephew of
the deceased Silverio Agtarap, are declared to be the sole heirs - in accordance with the various
provisions of the Civil Code in this respect.

Only in such special proceedings, wherein the necessary orders can be issued and executed, can
findings be made as to who are the heirs and what portions belong to them, the nature of their titles, and
in case of usufruct wjiat part pertains to each.

The judgment appealed from is affirmed, with the costs of this instance against the appellants.
[ G.R. No. 2370, December 12, 1905 ]
MARIANO ESCUETA, PLAINTIFF AND APPELLANT, VS. LEON SY-JUILLIONG,
DEFENDANT AND APPELLEE.

DECISION
WILLARD, J.:

In Manila, on the 21st of February, 1902, Joaquin Martinez Sy-Tiongtay executed his last will, whereby
he disposed of an estate of 212,862 pesos among his five children, Carlos Pabia, Baldomero (the
mother of these two being Chan-Sinnin), Felipa, Manuel, and Faustina (the mother of these three being
Ana Cuanci). Apparently the testator's business was connected with shipping interests. He afterwards
died, the exact date of his death not appearing in the record, and Sy-Giang was appointed his executor
and at the time this case arose was in possession of the property left by the deceased. After the death of
his father his son and heir, Baldomero, died, leaving no will, and leaving as his only heirs his brothers
and sisters above named. When Baldomero died the property left by his father had not been divided,
and he had an interest therein.
After the death of Baldomero, Carlos Pabia, Ms brother, employed the plaintiff, who is a lawyer, to
procure the appointment of an administrator of the estate of Baldomero and to attend to the settlement
of that estate in the Court of First Instance. The plaintiff, by virtue of such employment, performed
services and expended money in procuring the appointment of the administrator, and in other work
connected with the settlement of the estate. The person appointed as administrator of the estate of
Baldomero was Carlos Pabia. Carlos Pabia died in the month of February, 1904, and the defendant was
appointed administrator of the estate of Baldomero in succession to said Carlos, and this action was
commenced against the defendant in his capacity as administrator of said estate, to recover the value of
such services and the money so expended.

The court below entered judgment in favor of the defendant on the ground that the services rendered by
plaintiff were entirely unnecessary and that there was no occasion for the appointment of an
administrator of the estate of Baldomero. We can not agree with this opinion. Baldomero left an estate
of about 46,000 pesos. Almost all of it consisted of his interest in his father's estate. This estate had not
been divided and was in the hands of the executor of that estate. It appeared from the evidence that this
executor refused to deliver any of the property to the administrator of the estate of Baldomero, or to the
heirs of the latter. It also appears that the question as to who such heirs are is now in litigation in court.
Under these circumstances it seems to us that the appointment of an administrator and the settlement of
Baldomero's estate in the probate court was necessary. The final decree rendered in that proceeding
under the provisions of section 753 of the Code of Civil Procedure would be a determination of the
question as to who the heirs of Baldomero were, and when such decree was presented to Sy-Giang, the
executor of the estate of the father, he would be obliged to deliver the interest of Baldomero to the
persons named in that decree.

Moreover, in a case where there is an estate of 46,000 pesos, and there are no known debts, if not
necessary it is at least extremely advisable that an administrator be appointed and the estate regularly
administered in the Court of First Instance, exercising its probate jurisdiction, for the purpose of having
the fact that there are no debts conclusively determined. When an estate is regularly administered in the
Court of First Instance, and commissioners appointed before whom claims must be presented within
the time fixed in the order, they are by law, with some few exceptions, barred unless so presented. This
time may be limited by the court to six months. It is important to the heirs of an estate to know as soon
after the death of the intestate as possible what claims exist against it. If they then know what demands
are made against it, they have an opportunity to ascertain the facts relating to such demands when
evidence concerning their validity can be easily obtained. Unfounded claims in such cases can be more
easily defeated than they could if they were presented several years after the death of the intestate.

So far from the services of the plaintiff being unnecessary in this case, we think that he acted wisely in
advising his client that the estate of Baldomero should be regularly administered in court, and we think
he has a claim for the amount of money he expended on account of the estate, and for the reasonable
value of his services.

The question remains, however, against whom this claim can be enforced by him. The claim or cause of
action arose after the death of Baldomero. It was therefore not a proper claim to be presented before the
commissioners appointed in Baldomero's estate. (Philippine Trading Company, Ltd., r,s'. Cross-field,
Judge.[1])

The contract which the plaintiff made was made with Carlos Pabia. If it was made with Carlos Pabia as
an individual, then the plaintiff's cause of action is against him. If it was made with Carlos Pabia as the
administrator of the estate of Baldomero, the question arises whether such a contract imposes any direct
liability upon the estate which the creditor can enforce by an action; whether he can secure a judgment
which will be binding and conclusive upon the estate and upon all the persons interested therein.

The provisions of the present Code of Civil Procedure relating to the settlement of estates of deceased
persons are taken from similar provisions in the United States. There the decisions, which are
numerous, are practically unanimous in holding that in a case like the present, the contract made
between the administrator and the lawyer does not bind the estate to such an extent that the lawyer can
maintain an action against it and recover a judgment which is binding upon it. In such a case the
creditor has two remedies: He can prosecute an action against the administrator as an individual. If
judgment is rendered against the administrator and it is paid by him, when he presents his final account
to the Court of First Instance as such administrator he can include the amount so paid as an expense of
administration. The creditor can also present a petition in the proceeding relating to the settlement of
the estate, 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. Whichever course is adopted the heirs and other
persons interested in the estate will have a right to inquire into the necessity for making the contract
and the value of the work performed by the attorney.

If Carlos Pabia were now alive the plaintiff might have a right of action against him, but under the rule
above stated he has no right of action against the present defendant, because he (the present defendant)
is not in any way connected with Carlos Pabia. He is not his executor or administrator. The estate
which the present defendant represents is the estate of Baldomero, and against that estate, as we have
seen, an ordinary action can not be maintained by the plaintiff.

The court below ordered the action to be dismissed. This judgment should be modified so as to provide
that the dismissal should be without prejudice to the right of the plaintiff to prosecute his claim against
the person responsible therefor, or to make an application in the proceeding for the settlement of the
estate of Baldomero for its allowance and payment. As so modified the judgment is affirmed. No costs
will be allowed in this court, and after the expiration of twenty days let judgment be entered in
accordance herewith and the case be returned to the court below for execution of said judgment. So
ordered.
[ G.R. No. 45736, May 26, 1939 ]
IN THE MATTER OF THE INTESTATE ESTATE OF THE DECEASED EMETERIO LOPEZ.
CONCEPCION LOPEZ, PETITIONER AND APPELLEE, VS. ADELA LOPEZ ET AL.,
OPPOSITORS AND APPELLANTS.

DECISION
MORAN, J.:

The primary issue raised in this appeal is whether or not Concepcion Lopez is an acknowledged natural
daughter of Emeterio Lopez who died intestate, leaving no legitimate descendants, ascendants or
widow.
Concepcion Lopez filed a petition in the intestate proceedings of the deceased Emeterio Lopez,
claiming to be an acknowledged natural daughter of the deceased and praying that she be declared his
universal heiress entitled to a summary award of his estate, same being valued at less than six thousand
pesos (P6,000), The oppositors-appellants, thru Attorney Simplicio B. Pena, filed an opposition,
denying petitioner's claim and praying that, as they are nephews and nieces of the deceased, they be
adjudged entitled to the property left by him. Concepcion Lopez filed later an amended petition,
alleging that, according to a new assessment, the estate was worth nine thousand pesos (P9,000) and
"that, therefore, its distribution could not be made summarily but thru regular administration
proceedings. Accordingly, an administrator was appointed who, thru Attorney Simplicio B. Bena, filed
later a motion for a declaration of heirs and prayed that the oppositors-appellants be so adjudged. After
hearing, the court issued an order declaring the petitioner an acknowledged natural daughter of the
deceased entitled to the rights accorded her by law. The oppositors appealed.

Contrary to appellants' contention it is a well-settled rule that a person claiming to be an acknowledged

natural child of a deceased need not maintain a separate action for recognition but may simply
intervene in the intestate proceedings, by alleging and proving therein his or her status as such, and
claiming accordingly the right to share in the inheritance. (Conde vs. Abaya, 13 Phil., 249; Severino
vs. Severino, 44 Phil., 343, 348; Gaas vs. Fortich, 54 Phil, 196.)

The petition filed by Concepcion Lopez in the intestate proceedings is alleged to be insufficient. It is
said that there is no prayer therein that she be declared an acknowledged natural child, but only that she
be adjudged universal heiress, of the deceased. In the body of the petition there is an allegation that she
is a natural child of the deceased and has been in an uninterrupted possession of such status. And
inasmuch as the recognition of her status is a prerequisite to her right to heirship, her prayer that she be
declared universal heiress implies a like prayer that she be recognized as an acknowledged natural
child. Furthermore, it is a well-settled rule of pleadings, applicable to motions or petitions, that the
prayer for relief, though part of the pleading, is no part of the cause of action or defense alleged therein,
and the pleader is entitled to as much relief as the facts duly pleaded may warrant. (Rosales vs. Reyes
and Ordoveza, 25 Phil., 495; Aguilar vs. Rubiato and Gonzalez Vila, 40 Phil., 570; Yañez de Barnuevo
vs. Fuster, 29 Phil., 606; Allarde vs. Abaya, 57 Phil., 909; Cf. Cohen and Cohen vs. Benguet
Commercial Co., 34 Phil., 526, 533.)

The facts found by the lower court as basis for the declaration that the petitioner had been in an
uninterrupted possession of the status of natural child of the deceased, are as follows:

"De las pruebas practicadas por la representacion de dicha Concepcion Lopez se han establecido los
siguientes hechos: Que Concepcion Lopez es hija natural del finado Emeterio Lopez habida con Juana
Cuison, quienes desde el nacimiento de aquella han estado conviviendo como marido y mujer, siendo
ambos solteros, hasta que fallecio dicha Juana Cuison; que Concepcion Lopez nacio el ano 1890 en
Lagonoy, Camarines Sur, habiendo sido desde entonces mantenida por su padre, quien durante su vida
ha costeado todas las necesidades de Concepcion Lopez, tratandola como su verdadera hija, pues cada
vez que aquel le Ilamaba a esta lo hacia llamandola con el apodo de 'Siong' y Concepcion, a su vez, le
contestaba a su padre 'papa;' que dicha Concepcion Lopez ha estado siempre viviendo con su difunto
padre Emeterio Lopez hasta que este fallecio el 24 de junio de 1931."
In previous cases, similar facts were held to be sufficient to entitle a natural child to recognition, (Cf.
Dizon vs. Ullmann, 13 Phil, 88; Allarde vs. Abaya, supra; Dalistan vs. Armas, 32 Phil., 648; see also
decision of the Supreme Court of Spain of Nov. 7, 1896.)
Appellants claim that they had no notice either of the petition for the declaration of heirs or of the date
set for the hearing thereof. We find in the record no evidence affirmatively showing that they had no
such notice; therefore, the presumption of regularity of proceedings should stand. In the motion for
reconsideration filed by them, the lack of notice is alleged; but the motion is not even verified.
Besides, according to the record Attorney Simplicio B. Pena was the counsel for both the administrator
and the oppositors-appellants. The petition for declaration of heirs, although signed by Attorney
Simplicio B. Pena as "abogado del administrador", was, in fact, a petition filed in behalf of the
oppositors-appellants as their right to succession is therein asserted and prayed for. Under these
circumstances, there exists sufficient ground for holding, as we do hold, that the oppositors-appellants
had notice of the petition as well as of the hearing where the said attorney was present.
[ G.R. No. 22451, December 22, 1924 ]
TAN SEN GUAN, SPECIAL ADMINISTRATOR OF THE INTESTATE ESTATE OF TAN
PENG SUE, (ALIAS TAN PENG CHO), (ALIAS CHAN BAI CHOO) , PLAINTIFF AND
APPELLEE, VS. GO SIU SAN, ADMINISTRATOR OF THE TESTATE ESTATE OF
ANTONIO TAMPOCO, DEFENDANT AND APPELLANT.

DECISION
VILLAMOR, J.:

The record shows that the plaintiff is the administrator of the intestate estate of Tan Peng Sue, just as
the defendant is the administrator in the testamentary proceeding for the settlement of the estate of
Antonio Tampoco; that, according to the books kept by the defendant administrator, Antonio Tampoco
owed Tan Peng Sue, about the month of January, 1920, the sum of P25,802.60, which, with the interest
stipulated by the two deceased Tan Peng Sue and Antonio Tampoco in their lifetime at the rate of 9
6/10 per cent per year, amounted to P30,272.89 at the end of the year 1922; that upon the death of
Antonio Tampoco, which occurred on February 5, 1920, proceeding was instituted in the Court of First
Instance of Manila for the settlement of his estate; that on December 14 of that year commissioners
were appointed to hear and decide whatever claim might be presented against the estate; that said
commissioners qualified as such in due time, and rendered their final report on June 27, 1921, which
was approved by the court below on July 14 of said year; that about August 30, 1922, after the approval
by the court of the report of the committee on claims, the plaintiff, in his capacity as administrator of
the estate of Tan Peng Sue, moved the court that the committee on claims be again authorized, or a new
committee appointed, to hear and decide a claim that he had and which he was to present against the
estate, alleging, among other grounds, that the administrator Go Sui San had been assuring the heirs of
Tan Peng Sue that they would not lose their credit, were in no need of presenting their claim, and
would be paid by the heirs of Antonio Tampoco as soon as they should ask for it, and that in the
meantime the credit might continue in the business of the deceased Antonio Tampoco and thus earn
interest.

Passing upon this motion, the Honorable Geo. R. Harvey, judge, on September 21, 1922, appointed
new commissioners, holding that the committee on claims did not comply with the imperative
provisions of sections 687 and 693 of the Code of Civil Procedure in rendering its report, and that the
motion of the plaintiff Tan Sen Guan was in accordance with the provisions of section 690 of Act No.
190. After due proceeding the new commissioners admitted the claim of the plaintiff, recommending its
payment by the defendant administrator, which was by agreement of the parties estimated at
P30,272.89 at the end of the year 1922.

On Decemebr 22, 1923, the court presided over by Judge Anacleto Diaz rendered decision, absolving
the defendant administrator of the estate of Antonio Tampoco from the complaint, holding that the
commissioners appointed on September 21,1922, had no authority under the law to hear and decide
said claim, because the court that had appointed them had on the said date no jurisdiction to appoint
them in view of the fact that more than fourteen months have elapsed since their final report was
submitted by the former committee on claims in the aforesaid testamentary proceeding and approved
by the court. To this decision the plaintiff excepted on the 29th day of the same month, and moved for
new trial on January 9, 1924, on the ground that said decision was against the law and the facts proven
at the trial.

On March 27, 1924, the lower court presided over by the Honorable Geo. R. Harvey, judge, after
considering the motion for new trial, rendered a new decision, setting aside that of December 22, 1923,
and ordering the administrator of the estate of Antonio Tampoco to pay the administrator of the estate
of Tan Peng Sue the sum of P28,802.60, with interest thereon at the rate of 9 6/10 per cent per annum
from March 28, 1920. From this decision the administrator of the estate of Antonio Tampoco appealed,
and his counsel in this court prays for the reversal of the decision appealed from, alleging that the lower
court erred: (a) In setting aside its former decision and in entering a new decision entirely contrary to
the preceding one, instead of granting a new trial; (b) in holding that the claim presented was valid and
effective at the time it was presented, and in not holding that the same was extinguished at that time
under the law; and (c) in not absolving the defendant from the complaint.

The first assignment of error raises the same question as that in issue" in the case of Cordovero and
Alcazar vs. Villaruz and Borromeo, R. G. No. 21586,[1] recently decided by this court, as to the legal
effect of a motion for new trial under section 145, subsection 3, of the Code of Civil Procedure. In that
case it was held that the discretionary power granted the judges by section 145 of the Code of Civil
Procedure to revise or amend their judgments, before the same become final, may be exercised upon a
motion based on section 145, subsection 3, jointly with, or separately from, the power to grant new
trial, although the exercise of the power to grant new trial necessarily requires the revocation of the
former judgment; that under section 145, a judge may correct errors in his decisions, and in revoking
his original decision by amending it upon the motion of a party or his own, he has not necessarily to
order a reopening of the case. Therefore this assignment must be overruled.

Disregarding this feature of the case, what is important to decide is whether or not this action has
prescribed, as contended by the defendant.

The pertinent part of section 695 of the Code of Civil Procedure provides:

"A person having a claim against a deceased person proper to be allowed by the committee, who does
not, after publication of the required notice, exhibit his claim to the committee as provided in this
chapter, shall be barred from recovering such demand or from pleading the same in offset to any action,
except as hereinafter provided."

Provisions similar to this are found in the statutes of many, if not all the, states of the Union, and are
ordinarily alluded to as statutes relative to claims not presented in due time. It was enacted in order to
facilitate the speedy liquidation of estates, and to that end, it bars all proceeding when the claim is one
that was not presented after the publication of the notice required.

To avoid the effect of section 695, the plaintiff lays stress on two circumstances. In the first place, he
says that his failure to present the claim to the committee appointed by the court on September 21,
1922, was due to the machinations and fraudulent and false representations of the defendant. While it is
easy to understand that the interests of the plaintiff, in his capacity as administrator of the estate of Tan
Peng Sue, were not duly protected, and that his conduct was, to a certain extent, influenced by the
unfavorable circumstances that surrounded him, yet we hold that prescription cannot be avoided on the
ground of fraud or undue influence. The failure of Tan Chu Lay, heir of Tan Peng Sue, to present his
claim was an omission committed by an heir who had knowledge of the existence of the credit of his
deceased father. The fact that Tan Chu Lay might have been induced by fraudulent machinations and
unlawful influence of the defendant administrator cannot affect the legal consequences of said act. And
even if it be admitted that the widow of Tan Peng Sue was in China while the committee on claims was
acting in the proceeding for the settlement of Antonio Tampoco's estate, still the result would be the
same. The law does not make any reservation or exception whatever, and this court cannot make either.
"* * * Where the statute of non-claim makes no exception as to any persons or class of persons, the
courts can make none; and hence in the absence of some provision to the contrary, the statutes of non-
claim run against non-resident as well as resident, and infant as well as adult claimants, and also
against insane persons, and the estate of a deceased creditor. According to the weight of authority the
statutes of non-claim, unlike the general statutes of limitations, run against the state. * * *" (18 Cyc,
468.)

Secondly, to-avoid the effect of section 695, the plaintiff alleges that the notice to the creditors was not
published in the manner prescribed by section 687 of the Code of Civil Procedure, which provides:

"The committee so appointed shall appoint convenient times and places for the examination and
allowance of claims, and, within sixty days from the time of their appointment, shall post a notice in
four public places in the province stating the times and places of their meeting, and the time limited for
creditors to present their claims, and shall publish the same three weeks successively in a newspaper of
general circulation in the province, and give such other notice as the court directs. The court, in the
commission issued to the committee, shall designate the paper in which the notice shall be published,
and the number of places in the province in which it shall be posted, and any other mode of notice
which the court directs."

Section 693 requires the committee to state in their report among other things, "the manner in which
notice was given to the claimants." The report of the committee was introduced as Exhibit L in the
testamentary proceeding, and really it was not written exactly in accordance with the technicality of the
law. There is, however, attached to said report, as a part thereof, the affidavit of the editor of the
newspaper La Nacion, wherein it appears that the committee on claims in the aforesaid proceeding had
published for three consecutive weeks a notice to claimants, stating that they might present their claims
within the period of six months, the committee to hold meetings at the office of Attorney M. G.
Goyena, room No. 1, 34, Escolta, on the last Wednesday of each month at 3.30 p. m. for the purpose of
hearing and deciding claims. It, thus, appears that the committee complied with the requirements of the
law as to publication of notice, so much so that in the stipulation of facts it is stated that the
commissioners qualified, and under the date of December 14,1920, published in the newspaper La
Nacion the notice to claimants prescribed by the law for three consecutive weeks. There are also
attached to the report of the committee, the appointment issued by the court, in which the places are
designated where the notice should be posted, and the newspaper in which it should be published for
three weeks, giving the creditors the period of six months to present their claims. We think that the
documents attached to the report of said committee, the stipulation of facts and the approval of said
report by the trial court constitute a conclusive proof that the commissioners have complied with the
statute, requiring the publication of the notice to the creditors.

Before a credit may be held barred by our procedural statutes relative to liquidation of inheritance, it
must appear, among other things, that the committee have designated convenient hours and places for
the holding of their meetings for the examination and admission of claims, and that they have published
this fact in the manner provided by the law. Unless this is done, the right of a creditor cannot prescribe,
and he who claims the benefit of prescription has the burden of proof.

In these terms does the Supreme Court of Vermont comment on the statute of that State from which
section 695 of our Code of Civil Procedure was taken. (Roberts vs. Estate of Burton, 27 Vt., 396.)
Under general principles, there can be no doubt but that, as the statutory provision in question has a
tendency to destroy rights, it should not be extended to cases distinct from those included in its
language; and all the authorities, without exception, hold that statutes of this character must be strictly
construed, and the legal prescription of action will not be held to take effect in a particular case unless
the provision relative to the publication of notices have been entirely complied with.

Under section 690, a creditor who has failed to present his claim within the period fixed by the
committee on claims may apply to the court, within six months after the period previously fixed, for the
renewal of the commission for the purpose of examining his claim. Also a creditor may make such
application even after six months from the expiration of the period formerly fixed and before the final
settlement of the estate, if the committee shall have failed to give the notice required by section 687.
The record shows that the application of the plaintiff was presented fourteen months after the
expiration of the period fixed for the filing of claims. And while it was presented before the final
settlement of the estate of Antonio Tampoco, yet, it having been proved that the committee had
published in the newspaper La Nacion the notice required by law, there was no possible ground for
granting said application. Even considering this application under section 113 of the Code of Civil
Procedure, we believe that the lapse of fourteen months is an unsurmountable barrier opposing the
granting of said application.

It matters not that the defendant did not appeal from the order of the lower court appointing new
commissioners, if it is taken into consideration that it was entered beyond the authority given by
section 690. And as the defendant objected to said appointment, we believe that he is now entitled to
raise the point in this court.

For the foregoing the judgment appealed from is reversed, and it is hereby declared that the plaintiff
appellee has lost his right to enforce his claim in this proceeding, without pronouncement as to costs.
So ordered.
[ G.R. No. L-30453, December 04, 1989 ]
ANGELINA PUENTEVELLA ECHAUS, IN HER OWN BEHALF AND AS
ADMINISTRATRIX OF THE ESTATE OF LUIS PUENTEVELLA, ASSISTED BY HER
HUSBAND, RENE ECHAUS, PETITIONER, VS. HON. RAMON BLANCO, AS JUDGE OF
THE COURT OF FIRST INSTANCE OF ILOILO, AND PHILIPPINE COMMERCIAL &
INDUSTRIAL BANK, AS ADMINISTRATOR OF THE TESTATE ESTATE OF THE LATE
CHARLES NEWTON HODGES, AVELINA A. MAGNO, AS ADMINISTRATRIX OF THE
TESTATE ESTATE OF THE LATE LINNIE JANE HODGES, RESPONDENTS.

DECISION
MEDIALDEA, J.:

This is a petition for mandamus seeking to compel respondent presiding judge of the then Court of First
Instance of Iloilo (now Regional Trial Court) in Special Proceedings No. 1672 to issue an order
directing respondent Philippine Commercial and Industrial Bank (PCIB) as administrator of the estate
of the late Charles Newton Hodges (C.N. Hodges) to pay herein petitioner the amount of eight hundred
fifty?one thousand four hundred seventy-two pesos and eighty- three centavos (P851,472.83) with legal
interest, adjudged in Civil Case No. 6628.

The antecedent facts of the instant case are as follows:

Herein petitioner Angelina Puentevella Echaus, in her own behalf and as Administratrix of the intestate
estate of her deceased father Luis Puentevella, assisted by her husband, Rene Echaus, filed a complaint
on May 30, 1962 against Charles Newton Hodges (C. N. Hodges) praying for an accounting of the
business covering the Ba-Ta Subdivision, the recovery of her share in the profits and remaining assets
of their business and the payment of expenses and moral and exemplary damages (p. 10, Rollo). The
complaint was docketed as Civil Case No. 6628 of the Court of First Instance of Negros Occidental.

On July 20, 1962, C. N. Hodges, through counsel, filed his Answer (p. 10, Rollo).

Trial on the merits commenced on December 7, 1962, with the testimony of Angelina Echaus (p. 12,
Rollo). Sometime thereafter, counsel for C. N. Hodges manifested that defendant C. N. Hodges died
on December 25, 1962. No motion to dismiss was filed by C. N. Hodges' counsel. On February 14,
1964, the trial court ordered the substitution of the Philippine Commercial and Industrial Bank (PCIB),
as administrator of the estate of deceased C. N. Hodges, as party defendant. No objection to the order
was interposed by PCIB.

A petition for the settlement of the estate of C. N. Hodges was instituted before the Court of First
Instance of Iloilo, the date of which does not appear in the records, and docketed as Special
Proceedings No. 1672. A notice to creditors was published in "Yuhum" a newspaper of general
circulation in its issues of March 13, 20 and 27, 1963 (p. 190, Rollo).

On November 12, 1966, the parties in Civil Case No. 6628 submitted a stipulation of facts and
submitted the case for decision on the basis of said stipulation of facts (p. 12, Rollo). The parties also
agreed in the stipulation of facts that:

"1. The parties, being duly represented in the panel of Commissioners constituted by this Honorable
Court, shall be bound by the Commissioners' findings on the questions of facts presented to them for
determination, if such findings are accepted by this Honorable Court in its Decision.
"2. With a view to the speedy settlement and termination not only of the Estate of C. N. Hodges
(Special Proceedings 1672 of the Court of First Instance of Iloilo pending since 1962) but also of the
estate of Luis Puentevella (Special Proceedings 1968 of the Court of First Instance of Negros
Occidental pending since 1951), in accordance with the letter and spirit of the Rules of Court, and
relying upon the wisdom and impartiality of the Presiding Judge of this Honorable Court who is now
on the point of closing a brilliant and exemplary career on the Bench, the parties shall accept its
Decision herein as final.
"x x x." (p. 20, Rollo)
On December 5, 1966, judgment was rendered by the trial court in favor of plaintiff Angelina F.
Echaus, the dispositive portion of which states:

"IN VIEW OF ALL THE FOREGOING, the defendant, in its capacity as Administrator of the Estate of
Charles Newton Hodges is hereby ordered to pay the plaintiffs the sum of EIGHT(Y) HUNDRED
FIFTY-ONE THOUSAND FOUR HUNDRED SEVENTY-TWO PESOS and EIGHTY THREE
CENTAVOS (P851,472.83) with legal interest thereon from date of judgment until paid. All other
claims arising from the counterclaim, and third-party complaint, not otherwise adjudicated, are hereby
dismissed, with costs against the defendant.
"IT IS SO ORDERED."
"Bacolod City, Philippines, December 5, 1966.
(SGD) EDUARDO D. ENRIQUEZ
Judge"
(p. 41, Rollo)
On January 21, 1967, the same trial court issued an order granting plaintiff's motion for the issuance of
a writ of execution (p. 43, Rollo) against PCIB. However, the writ was not enforced as plaintiff opted
to file a motion dated February 20, 1967 (pp. 44-46, Rollo) in Special Proceedings No. 1672 (estate
proceedings of deceased C. N. Hodges) for the payment of the judgment. Herein respondent Avelina A.
Magno, as administratrix of the estate of the deceased Linnie Jane Hodges (wife of C. N. Hodges)
opposed the motion (p. 3, Rollo). Meanwhile, in Civil Case No. 6628, Avelina Magno, filed a petition
for relief from judgment on March 27, 1967 and a motion to intervene dated April 24, 1967 (p. 57,
Rollo). On June 6, 1967, the heirs of C. N. Hodges filed a motion to intervene in the same Civil Case
No. 6628. On July 20, 1967, respondent Judge Ramon Blanco, presiding judge of the Court of First
Instance of Iloilo City, Branch V, taking cognizance of Special Proceedings No. 1672, issued an Order
(pp. 52-56, Rollo) holding in abeyance the resolution of the motion of Angelina Echaus for payment of
the judgment rendered in her favor in Civil Case No. 6628, until after the resolution of the "Petition for
Relief from Judgment" filed by Administratrix Magno before the Court of First Instance of Negros
Occidental in Civil Case No. 6628.

On November 23, 1967, the petition for relief from judgment was denied on the ground that Magno, as
administratrix of the estate of Linnie Jane Hodges was not a party to the case (p. 58, Rollo). The twin
motions to intervene filed by the heirs of C. N. Hodges and Evelina Magno, as administratrix of the
estate of Linnie Jane Hodges were likewise denied on the ground that pleadings in intervention are
allowed only before or during the trial and not when a final and executory judgment had already been
rendered (p. 61, Rollo).

In a motion (pp. 66-68, Rollo) dated November 25, 1968, Angelina P. Echaus prayed for the resolution
of her previous motion to direct payment of the judgment credit which was held in abeyance, stating
that the petition for relief from judgment filed in Civil Case No. 6628 was dismissed by the trial court
which dismissal has become final and executory in view of the failure of Avelina Magno to file a record
on appeal on time.
On February 26, 1969, respondent Judge Ramon Blanco issued an Order (pp. 72-74, Rollo) reiterating
his position that the motion to direct payment of the judgment credit cannot yet be resolved and holding
in abeyance the resolution thereof in view of the writ of preliminary injunction issued by the Supreme
Court in G.R. Nos. L-27860 and L-27896, (PCIB v. Blanco), enjoining respondent judge from hearing
Special Proceedings Nos. 1307 and 1672, entitled "Testate Estate of the late Linnie Jane Hodges" and
"Testate Estate of Charles N. Hodges," respectively. It is noted that in the same Order, respondent
judge mentioned that the writ of preliminary injunction issued by the Supreme Court was clarified in
another resolution dated October 4, 1967 to the effect that he (respondent judge) is not restrained from
approving final deeds of sale executed by the Administrator PCIB covering properties of the respective
estates and that he can act on such other routinary administrative matters necessary for the gathering
and preservation of the estate (pp. 73-74, Rollo).

The pertinent portion of said Order states:

"In G.R. Nos. L-27860 and L-27896, PCIB vs. Blanco, the Supreme Court on August 12, 1967 issued a
writ of preliminary injunction restraining the presiding judge of this Branch V from hearing Sp. Proc.
1307 and 1672 of the Court of First Instance of Iloilo entitled 'Testate Estate of the late Linnie Jane
Hodges and Testate Estate of C. N. Hodges' which writ of preliminary injunction was clarified by the
Supreme Court in its resolution of October 4, 1967 to the effect that the presiding judge of this Branch
V is not restrained from approving final deeds of sale executed by the administrator PCIB covering
properties of the said estate and that the presiding judge of this Branch can act on such other routinary
administration matters necessary for the gathering and preservation of the estate.
"In view therefore of the said writ of preliminary injunction, it is the considered opinion of the
undersigned presiding judge that he cannot act, meanwhile, on the motion or motions and the
oppositions thereto taking into account that the said motions involve substantive and mandatory
procedural requirements considering that the decision of the Court of First Instance of Negros
Occidental in Civil Case 6628 is being questioned by the oppositors as a money claim and as such
should have been prosecuted in the probate court.
"WHEREFORE, unless allowed by the Supreme Court to resolve the instant motions and oppositions
thereto thus, further clarifying the writ of preliminary injunction which was issued on August 12, 1967,
the resolution on the said motions and oppositions thereto is hereby held in abeyance.
"SO ORDERED."
In a manifestation (pp. 69-71, Rollo, Annex "H" of Petition) dated February 28, 1969, petitioner
manifested that private respondent Avelina Magno's petition for certiorari and mandamus (G.R. L-
30013) filed before this Court questioning the validity of the decision in Civil Case No. 6628 was
dismissed for lack of merit on January 15, 1969 (p. 109, Rollo). Still, petitioner failed to obtain an
affirmative response to their motion.

Petitioner then filed the instant petition for mandamus dated April 21, 1969 seeking: a) to set aside
respondent judge's order of February 26, 1969; and b) to order PCIB to pay the judgment credit in Civil
Case No. 6628.

It is the contention of petitioner that the judgment in Civil Case No. 6628 is now final and executory
and the execution thereof becomes a matter of right under Rule 39, Section 1 of the Rules of Court.
The duty to order the execution of a final and executory judgment is ministerial and the failure of
respondent judge to issue such order is a proper case for mandamus.
On the other hand, private respondents contend that the judgment rendered in Civil Case No. 6628 is
null and void for having been rendered without jurisdiction. Money claims against a defendant who
dies without a judgment having been rendered in the Regional Trial Court shall be dismissed and
prosecuted as a claim in the estate proceedings as laid down under Section 21, Rule 3 of the Rules of
Court. This procedure was not followed in Civil Case No. 6628. Also, even if it is assumed that the
judgment in the said civil case is valid, the claim presented in the estate proceedings is already barred
by the statute of non-claims.

It must be noted that Civil Case No. 6628 which is a money claim, was instituted during the lifetime of
C. N. Hodges. During its pendency and before a decision could be rendered by the Regional Trial
Court hearing the case, C. N. Hodges died. Upon his death, he was substituted by PCIB as
administrator of his estate. Being a money claim, said civil case should have been dismissed and
instituted as a money claim in the intestate estate of C. N. Hodges (Sp. Proc. No. 1627) in accordance
with Section 21 of Rule 3 of the Revised Rules of Court, which provides:

"Sec. 21. Where claim does not survive. -When the action is for recovery of money, debt or interest
thereon, and the defendant dies before final judgment in the Court of First Instance, it shall be
dismissed to be prosecuted in the manner especially provided in these rules."
However, this is not to suggest that because the claim of petitioner was pursued to its conclusion in
Civil Case No. 6682 instead of being dismissed and filed as a money claim in Special Proceedings No.
1672, the judgment rendered therein is null and void. The case of Ignacio v. Pampanga Bus Co., Inc.
L-18936, May 23, 1967, 20 SCRA 126, is in point. In the said case, Pampanga Bus Co., Inc.,
(Pambusco) filed a suit to collect P105,000.00 against defendants Valentin Fernando and Encarnacion
Elchico Vda. de Fernando. The latter died during the pendency of the case. On Pambusco's motion,
the court ordered Jose Nicolas, then Administrator, to substitute for deceased Encarnacion Elchico Vda.
de Fernando as one of the defendants. No objection to the order was registered. A judgment was
rendered therein which became final. Pambusco then moved in the intestate proceedings of the
deceased for the payment of the judgment credit. The administratrices opposed. Pambusco's motion
was granted. This order admitting Pambusco's claim was brought to Us. We ruled therein that:

"1. x x x
"The philosophy behind the rule which provides for the dismissal of the civil case is that, upon the
death of a defendant, all money claims should be filed in the testate or intestate proceedings 'to avoid
useless duplicity of procedure.' Obviously, the legal precept just quoted is procedural in nature. It
outlines the method by which an action for recovery of money, debt or interest may continue, upon the
terms therein prescribed. Whether the original suit for the recovery of money -- as here -- proceeds to
its conclusion, or is dismissed and the claim covered thereby filed with the probate court, one thing is
certain: no substantial rights of the parties are prejudiced.
"2. x x x. Now that the judgment has become final, the estate cannot be heard to say that said
judgment --reached after a full dress trial on the merits -- will now go for naught. The estate has thus
waived its right to have Pambusco's claim re-litigated in the estate proceedings. For, though
presentment of probate claims is imperative, it is generally understood that it may be waived by the
estate's representative. And, waiver is to be determined from the administrator's 'acts and conduct.'
Certainly, the administrator's failure to plead the statute of non-claims, his active participation, and
resistance to plaintiff's claim, in the civil suit, amount to such waiver.
"3. Courts are loathe' to overturn a final judgment. Judicial proceedings are entitled to respect. Non
quieta movere. Plaintiff's claim has passed the test in three courts of justice: the Court of First
Instance, the Court of Appeals and this Court. The judgment in plaintiff's favor should be enforced.
Appellant's technical objection -- after judgment had become final in the civil case -- that plaintiff's
claim should have been litigated in the probate court does not impair the validity of said judgment.
For, such objection does not go into the court's jurisdiction over the subject matter."
Moreover, when PCIB as administrator of the estate of C. N. Hodges was ordered to be substituted as
defendant, it registered no objection to the order. Thus, even if We admit for the sake of argument that
the trial court, after the death of C. N. Hodges has no jurisdiction to render a judgment therein, the
argument must fail. PCIB, participated actively in the said case. It did not appeal the decision
rendered therein, neither did it raise the issue of jurisdiction at any stage. It has been consistently held
by this court that while lack of jurisdiction may be assailed at any stage, a party's active participation in
the proceedings before the court without jurisdiction will estop such party from assailing such lack of
jurisdiction (Tajonera v. Lamaroza, (1981), 110 SCRA 438; Nieta v. Manila Banking Corp., (1983), 124
SCRA 455; cited in Sps. Antonio Martinez and Benedicta Balatbat v. The Hon. Judge de la Merced, et
al., G.R. No. 82039, June 20, 1989).

Of more importance is the fact that the validity of the decision in Civil Case No. 6628 had been passed
upon by Us with finality in G.R. No. L-30013 (PCIB v. Blanco). In that case, the estate of C. N.
Hodges and Linnie Jane Hodges questioned the decision of the trial court dismissing the petition for
relief from judgment. We dismissed the petition for lack of merit on January 15, 1969 (p. 109, Rollo).

Private respondent Avelina Magno, in her memorandum in lieu of oral argument, alleged that the
judgment sought to be enforced is barred under the Rules of Court (p.180, Rollo). The proceedings for
the settlement of the estate of C. N. Hodges was opened in 1962 and the notice to creditors was
published in "Yuhum," a newspaper of general circulation in its issues of March 12, 10, and 27, 1963.
Under Section 2, Rule 27 of the Rules of Court, the time provided for filing claims against the estate
shall be stated by the court in the notice, which shall not be more than twelve (12) months nor less than
six (6) months after the date of its first publication. Since petitioner filed her motion to direct payment
only on February 20, 1967, which is more than four years from the publication of the notice then, it is
already barred.

The above argument of private respondent is not correct. The Rules of Court allows a creditor to file
his claim after the period set by the court in the notice to creditors, provided the conditions stated in the
rules are present. The rule provides:

"Sec. 2. Time within which claims shall be filed. - XXX. 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 time not exceeding one (1) month." (Rule 86)
It is clear from the foregoing (Section 2 of Rule Rule 87 [now Rule 86]) that the period prescribed in
the notice to creditors is not exclusive; that money claims against the estate may be allowed any time
before an order of distribution is entered, at the discretion of the court for cause and upon such terms as
are equitable (Quisumbing v. Guison, 76 Phil. 730; Edmands v. Phil. Trust Co., G.R. No. L-2670,
September 29, 1950, 48 O.G. 139; Paulin v. Aquino, G.R. No. L-11267, March 20, 1958; Afan v. de
Guzman, G.R. No.L-14715, April 28, 1960). At the time petitioner's motion to direct payment of the
judgment credit was filed, no order of distribution was issued yet. Also, it is worthy to cite herein a
situation, similar to the case at bar, which was considered by this court as a good excuse for the late
filing of a claim against the decedent:

"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 for tardiness in the filing of the claim. (In pari materia: De Rama v. Palileo, L-
18935, Feb. 26, 1965). And the order of the final distribution is still to be given." (Ignacio v.
Pambusco, supra.)
It is also petitioner's contention that properties under custodia legis may be reached for the satisfaction
of a judgment, citing the case of Reganon v. Imperial, G.R. No. 24434, January 17, 1968; Fores v.
Santos, G.R. No. L-24538, May 4, 1968and De Borja, et al. v. De Borja, et al., L-14951, August 31,
1961. A cursory reading of the text of the above-cited cases will reveal that what is involved therein is
the attachment for purposes of execution of the interest of an heir (to answer for claims against such
heir) in the estate of the decedent which is allowed by the Rules; and not the attachment of the estate
itself nor any property therein for the satisfaction of a claim against the decedent:

"Sec. 7. Attachment of real and personal property; recording thereof. - Properties shall be attached by
the officer executing the order in the following manner:
"x x x
"(f) The interest of the party against whom attachment is issued in property belonging to the estate of
the decedent, whether as heir, legatee or devisee, by serving the executor or administrator or other
personal representative of the decedent with a copy of the order and notice that said interest is attached.
x x x." (Rule 57, Rules of Court)
While the judgment in Civil Case No. 6628 has become final and executory, execution is not the proper
remedy to enforce payment thereof. The ordinary procedure by which to settle claims of indebtedness
against the estate of a deceased person, x x x, is for the claimant to present a claim before the probate
court so that said court may order the administrator to pay the amount thereof (Domingo v. Garlitos, L-
18994, June 29, 1963). This was the procedure correctly chosen by petitioner. In Aldamiz v. Judge of
the Court of First Instance of Mindoro, L-2360, December 29, 1949, We held:

"x x x a writ of execution is not the proper procedure allowed by the Rules of 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 or mortgage 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."
"x x x.
And in the case of Domingo v. Garlitos, p. 446, supra:

"The legal basis for such a procedure is the fact that in the testate or intestate proceedings to settle the
estate of a deceased person, the properties belonging to the estate are under the jurisdiction of the Court
and such jurisdiction continues until said properties have been distributed among the heirs entitled
thereto. During the pendency of the proceedings all the estate is in custodia legis and the proper
procedure is not to allow the sheriff, in case of a court judgment, to seize the properties but to ask the
court for an order to require the administrator to pay the amount due from the estate and required to be
paid."
Nevertheless, while We hold that the judgment credit should be admitted as a claim against the estate of
C.N. Hodges, the question of whether an order to direct payment thereof is compellable by mandamus
is doubtful. At the time the second motion for payment was filed by petitioner, respondent judge's
hands were "tied" by an existing writ of preliminary injunction issued by Us in G.R. Nos. L-27860 and
L-27896 (PCIB v. Blanco) restraining him from hearing Special Proceedings Nos. 1307 (Testate Estate
of Linnie Jane Hodges) and No. 1672 (Testate Estate of C. N. Hodges where the motion to direct
payment was filed). While this writ was clarified by a subsequent resolution issued on October 4, 1967
to the effect that respondent judge is not restrained from approving final deeds of sale executed by the
administrator PCIB covering properties of the estate and from acting on such other routinary
administration matters necessary for the gathering and preservation of the estate, it is clear that an order
to direct payment is not embraced under the clarificatory resolution. Even if petitioners' judgment
credit were allowed as a claim against the estate, immediate payment thereof by the administrator of
the estate, is not a matter of right. A judgment against the executor or administrator shall be that he
pay, in due course of administration, the amount ascertained to be due, and it shall not create a lien
upon the property of the estate, or give the judgment creditor any priority in payment (Sec. 13, Rule 86,
Revised Rules). The time for paying debts (and legacies) is to be fixed by the probate court having
jurisdiction over the estate of the deceased (Sec. 15, Rule 18). In the absence of any showing that
respondent judge who is taking cognizance of the estate proceedings had already allowed the
administrator to dispose of the estate and to pay the debts and legacies of the deceased, a writ of
mandamus will not issue to compel him to order payment of petitioner's claim.

It is essential to the issuance of the writ of mandamus that the (plaintiffs) should have a clear legal right
to the thing demanded and it must be the imperative duty of the defendant to perform the act required
(Province of Pangasinan v. Reparations Commission, 80 SCRA 376).

ACCORDINGLY, the petition for the writ of mandamus is DISMISSED for lack of merit.

SO ORDERED.
[ G.R. No. 121597, June 29, 2001 ]
PHILIPPINE NATIONAL BANK, PETITIONER, VS. HON. COURT OF APPEALS, ALLAN
M. CHUA AS SPECIAL ADMINISTRATOR OF THE INTESTATE ESTATE OF THE LATE
ANTONIO M. CHUA AND MRS. ASUNCION M. CHUA, RESPONDENTS.

DECISION
QUISUMBING, J.:

This petition assails the decision[1] of the Court of Appeals dated July 25, 1995 in CA-G.R. CV No.
36546, affirming the decision dated September 4, 1991 of the Regional Trial Court of Balayan,
Batangas, Branch 10 in Civil Case No. 1988.

The facts, as found by the trial court and by the Court of Appeals, are not disputed.

The spouses Antonio M. Chua and Asuncion M. Chua were the owners of a parcel of land covered by
Transfer Certificate of Title No. P-142 and registered in their names. Upon Antonio's death, the probate
court appointed his son, private respondent Allan M. Chua, special administrator of Antonio's intestate
estate. The court also authorized Allan to obtain a loan accommodation of five hundred fifty thousand
(P550,000.00) pesos from petitioner Philippine National Bank to be secured by a real estate mortgage
over the above-mentioned parcel of land.

On June 29, 1989, Allan obtained a loan of P450,000.00 from petitioner PNB evidenced by a
promissory note, payable on June 29, 1990, with interest at 18.8 percent per annum. To secure the loan,
Allan executed a deed of real estate mortgage on the aforesaid parcel of land.

On December 27, 1990, for failure to pay the loan in full, the bank extrajudicially foreclosed the real
estate mortgage, through the Ex-Officio Sheriff, who conducted a public auction of the mortgaged
property pursuant to the authority provided for in the deed of real estate mortgage. During the auction,
PNB was the highest bidder with a bid price P306,360.00. Since PNB's total claim as of the date of the
auction sale was P679,185.63, the loan had a payable balance of P372,825.63. To claim this deficiency,
PNB instituted an action with the RTC, Balayan, Batangas, Branch 10, docketed as Civil Case No.
1988, against both Mrs. Asuncion M. Chua and Allan Chua in his capacity as special administrator of
his father's intestate estate.

Despite summons duly served, private respondents did not answer the complaint. The trial court
declared them in default and received evidence ex parte.

On September 4, 1991, the RTC rendered its decision, ordering the dismissal of PNB's complaint.[2]

On appeal, the Court of Appeals affirmed the RTC decision by dismissing PNB's appeal for lack of
merit.[3]

Hence, the present petition for review on certiorari under Rule 45 of the Rules of Court. Petitioner cites
two grounds:

THE CA ERRED IN HOLDING THAT PNB CAN NO LONGER PURSUE ITS DEFICIENCY
CLAIM AGAINST THE ESTATE OF DECEASED ANTONIO M. CHUA, HAVING ELECTED ONE
OF ITS ALTERNATIVE RIGHT PURSUANT TO SECTION 7 RULE 86 OF THE RULES OF
COURT DESPITE A SPECIAL ENACTMENT (ACT. NO. 3135) COVERING EXTRAJUDICIAL
FORECLOSURE SALE ALLOWING RECOURSE FOR A DEFICIENCY CLAIM AS SUPPORTED
BY CONTEMPORARY JURISPRUDENCE.
II

THE CA ERRED IN HOLDING THAT ALLAN M. CHUA, AS SPECIAL ADMINISTRATOR OF

THE INTESTATE ESTATE OF HIS DECEASED FATHER ANTONIO M. CHUA ON ONE HAND,
AND HIM AND HIS MOTHER ASUNCION CHUA AS HEIRS ON THE OTHER HAND ARE NO
LONGER LIABLE FOR THE DEBTS OF THE ESTATE.[4]
The primary issue posed before us is whether or not it was error for the Court of Appeals 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. A resolution of this issue will also resolve the secondary
issue concerning any further liability of respondents and of the decedent's estate.

Petitioner contends that under prevailing jurisprudence, when the proceeds of the sale are insufficient
to pay the debt, the mortgagee has the right to recover the deficiency from the debtor.[5] It also
contends that Act 3135, otherwise known as "An Act to Regulate the Sale of Property under Special
Powers Inserted in or Annexed to Real Estate Mortgages," is the law applicable to this case of
foreclosure sale and not Section 7 of Rule 86 of the Revised Rules of Court[6] as held by the Court of
Appeals.[7]

Private respondents argue that having chosen the remedy of extrajudicial foreclosure of the mortgaged
property of the deceased, petitioner is precluded from pursuing its deficiency claim against the estate of
Antonio M. Chua. This they say is pursuant to 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.
Pertinent to the issue at bar, according to petitioner, are our decisions he cited.[8] Prudential Bank v.
Martinez, 189 SCRA 612, 615 (1990), is particularly cited by petitioner as precedent for 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 petitioner's 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 Court of Appeals correctly stated,
the Rules of Court on Special Proceedings comes into play decisively.

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.
In the present case, it is undisputed that the conditions under the aforecited rule have been complied
with. It follows that we must consider Sec. 7 of Rule 86, appropriately applicable to the controversy at
hand.

Case law now holds that this rule 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.[9]

In Perez v. Philippine National Bank,[10] reversing Pasno vs. Ravina,[11] we held:

The ruling in Pasno vs. Ravina not having been reiterated in any other case, we have carefully
reexamined the same, and after mature deliberation have reached the conclusion that the dissenting
opinion is more in conformity with reason and law. Of the three alternative courses that section 7, Rule
87 (now Rule 86), offers the mortgage creditor, to wit, (1) to waive the mortgage and claim the entire
debt from the estate of the mortgagor as an ordinary claim; (2) 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, the
majority opinion in Pasno vs. Ravina, in requiring a judicial foreclosure, virtually wipes out the third
alternative conceded by the Rules to the mortgage creditor, and which would precisely include extra-
judicial foreclosures by contrast with the second alternative.
The plain result of adopting the last mode of foreclosure is that the creditor waives his right to recover
any deficiency from the estate.[12] Following the Perez ruling that the third mode includes
extrajudicial foreclosure sales, the result of extrajudicial foreclosure is that the creditor waives any
further deficiency claim. The dissent in Pasno, as adopted in Perez, supports this conclusion, thus:

When account is further taken of the fact that a creditor who elects to foreclose by extrajudicial sale
waives all right to recover against the estate of the deceased debtor for any deficiency remaining unpaid
after the sale it will be readily seen that the decision in this case (referring to the majority opinion) will
impose a burden upon the estates of deceased persons who have mortgaged real property for the
security of debts, without any compensatory advantage.
Clearly, in our view, petitioner herein has chosen the mortgage-creditor's option of extrajudicially
foreclosing the mortgaged property of the Chuas. This choice now bars any subsequent deficiency
claim against the estate of the deceased, Antonio M. Chua. 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 late Antonio M. Chua's estate.

WHEREFORE, finding no reversible error committed by respondent Court of Appeals, the instant
petition is hereby DENIED. The assailed decision of the Court of Appeals in CA-G.R. CV No. 36546 is
AFFIRMED. Costs against petitioner.

SO ORDERED.
[ G.R. No. 48115, October 12, 1942 ]
INTESTATE ESTATE OF THE DECEASED FLORENHNO SAN GIL. JOSEFA R. OPPUS,
PETITIONER AND APPELLANT, VS. BONIFACIO SAN GIL, ETC., OPPOSITOR AND
APPELLEE.

DECISION
OZAETA, J.:

In civil case No. 3498 of the Court of First Instance of Tayabas, the herein appellant Josefa R. Qppus
sued the herein M administrator of the intestate estate of the deceased Florentino San Gil for the
possession, among others, of the following personalties: 24 beds, 1 "Schkler" piano, 12 chairs, 8 small
tables, 2 iceboxes, 1 phonograph, 2 long dining tables, and 1 big mirror. On November 1, 1933, the
court in said case rendered judgment ordering the defendant to deliver the possession of said furniture
to the plaintiff, For reasons that do not appear in the record, that judgment has not been satisfied.
On October 6, 1939, Josefa R. Oppus presented a motion in the above-entitled intestate proceeding
of Florentino San Gil, asking the court to order the administrator Bonifacio San Gil to deliver to her
the furniture above mentioned, The probate court denied said motion on the grounds (1) that the
furniture in question does not belong to the estate of the deceased Florentino San Gil and (2) that in any
event the execution of the judgment in civil case No. 3498 should be applied for in said case. We are
now asked to review and reverse that order.

The first ground stated by the probate court is correct because it was established in said civil case No.
3498 that the furniture in question belongs to the appellant Josefa R. Oppus, who bought it from the
deceased Florentino San Gil. The second ground is also well founded because the administrator
Bonifacio San Gil having been sued as such in the ordinary court and judgment having been rendered
there against him, we find no legal impediment to the execution of said judgment by order of the court
that rendered it. Appellant's contention that she has to apply to the probate court for the execution of
said judgment on the theory that the property in question is in custodia legis, is untenable. The
judgment in question is not one for a sum of money which has to be satisfied by levying execution on
property belonging to the estate and therefore in custodia legis. It is a judgment for the manual
delivery and possession of specific articles of personal property, the action for which survives by
express provision of law "and may be commenced and prosecuted by or against the executor or
administrator." (Section 703, Code of Civil Procedure; section 1, Rule 88, Rules of Court.) On the
one hand, the prosecution of an action against an executor or administrator which the law allows
regarding the possession of specific articles, necessarily includes the execution of the judgment that
may be entered in said action. On the other hand, once the court determines in such action that the
property in litigation belongs to the plaintiff and not to the estate of the deceased, it cannot be
maintained that such property is in custodia legis, it not forming part of the estate of the deceased.
Hence appellant's motion herein was not in order and was properly denied.

We might add that perhaps such motion in the probate court was resorted to instead of a petition for
execution in the ordinary court that rendered the judgment, because more than five years had
elapsed since it became final in December, 1933. Suffice it to say, however, that what the law does
not permit to be done directly cannot be done indirectly.

Lastly, we observe from the record (p. 37, B. of E.) that twice did appellant procure writs of
execution in said case No. 3498 first in February, 1934, and again in September, 1935. We cannot
understand why the judgment in question has remained unsatisfied.
The order appealed from is affirmed; but we refrain from awarding costs to the appellee because we
think his obstinate refusal to deliver the furniture in question to the appellant notwithstanding the
judgment of a competent tribunal is unjustifiable and unworthy of a law-abiding citizen. So ordered.
[ G.R. No. 3236, March 27, 1907 ]
SEBASTIAN ABIERA, ADMINISTRATOR OF THE ESTATE OF JUAN ABIERA,
DECEASED, PLAINTIFF AND APPELLEE, VS. MIGUEL ORIN, DEFENDANT AND
APPELLANT.

DECISION
MAPA, J.:

There was no new trial asked for in this case and therefore this court can not review the proofs
presented in the same. The judgment of the lower court was rendered in favor of the plaintiff, as special
administrator of the estate of Juan Abiera, deceased, who died intestate, which judgment is in accord
with the prayer of the complaint herein and orders the defendant to pay the sum of 1,000 pesos, as
claimed in said complaint.
The court below states, among other things, in its judgment rendered herein, the following:

"Vicenta Cacao, Mariano Cacao, and Petra Cacao were brothers and sisters. Vicenta Cacao married
Miguel Orin and after her said marriage left no descendants or ascendants, and Miguel Orin, Mariano
Cacao, and Juan Abiera in 1898 entered into an agreement in writing covering the disposition of the
properties and animals had and acquired during the marriage of Miguel Orin and Vicenta Cacao;
Mariano Cacao and Juan Abiera as representatives of their children, who are the only heirs as well as
the natural nephews of the deceased woman Cacao.

"Now, the plaintiff," continues the judgment, "has filed this complaint as special administrator of his
deceased father, Juan Abiera, alleging that the defendant has not complied with said contract and
agreement and prays the court to compel the compliance of the defendant therewith."

The tenor of this contract, according to the judgment referred to, is as follows:

"We, having knowledge and information of the inventory of the properties acquired during the married
state and life of Miguel Orin and the said Vicenta Cacao, by our contract have agreed, that Miguel Orin,
the widower, obligates himself to deliver to his brothers-in-law, as guardians and fathers of the heirs of
Petra Cacao, the value of one thousand pesos to each of them. The period within which to comply with
this contract is until August 15, next; this is the just amount of our inheritance."

From these statements of the judgment it is clearly seen that the deceased, Juan Abiera, entered into a
contract, the compliance of which is prayed for in the complaint herein, not as a personal right, but in
the name and representation of his children. There can be no doubt as to this. The contract deals with
the matter of the extrajudicial partition of the estate left by Vicenta Cacao whose heirs were, according
to the judgment, not Juan Abiera but his children. Abiera, therefore, had to act by force of law in the
representation of these children in treating in such contract as to the manner in which the said estate
was to be divided. It was for this reason, says the court below in emphatic terms, that Juan Abiera
became a party to the said contract as the representative of his children. It was for this reason also that
there is expressed in the same contract the fact that Miguel Orin obligated himself to pay over 1,000
pesos to Juan Abiera as guardian and father of the heirs of Petra Cacao. This Petra Cacao was the
deceased wife of Juan Abiera and the sister of Vicenta Cacao, whose estate is dealt with herein and
which estate came to be inherited and participated in, through legitimate succession, by the children of
Juan Abiera in representation of their mother, the said Petra Cacao.
Therefore, the true interested parties in the obligation contracted by the defendant herein, Miguel Orin,
are the children of Juan Abiera, and not the latter, for the simple reason that the obligation was
executed in their favor and not in favor of said Abiera. This being the fact, it is evident that the plaintiff
in his office as administrator of the deceased Juan Abiera has no right to ask for the compliance with
the said obligation. As such administrator he has only the right to institute such actions as correspond
and pertain to the estate which he is administering, and no other action dealing with contracts and
obligations contracted in favor of third persons, or others from whom he does not derive such right, can
be brought as such administrator.

On the other hand it is not necessary, it being too trivial, to refer to the right of Juan Abiera to represent
his children as father or guardian of the same, and that he has not transferred nor could he transfer to
the administrator of his estate such right from the mere fact that he was such administrator. As has been
stated, the said right attached to parental authority or guardianship was extinguished with the death of
Abiera, together with the parental right or the said guardianship this in fact and law. This was an
exclusively personal right that could not survive the person who had such right.

Consequently by reason of the considerations expressed above the court below incurred error in taking
into consideration the propriety of the complaint herein. This could not have been done legally, the
plaintiff not having the right of action and was without such right of action in the suit brought by him,
and this is the basis of the exception taken by the appellant and now before this court. It is true that this
exception on this point was not brought forward in the Court of First Instance, but it is also true that the
exception based on the lack of right of action can be submitted during any stage or state of the case, as
provided in section 93[1] of the Code of Civil Procedure.

Wherefore the judgment appealed from is reversed and the complaint dismissed, without special
mention as to the costs in both instances. After the expiration of twenty days from the notification of
this decision let judgment be entered in accordance herewith, and ten days thereafter let the case be
remanded to the court from whence it came for proper action. So ordered.
[ G.R. No. 1027, May 19, 1903 ]
RAMON DEL ROSAHIO, PLAINTIFF AND APPELLEE, VS. CLEMENTE DEL ROSARIO,
DEFENDANT AND APPELLANT.

DECISION
WILLARD, J.:

I. Don Nicolas del Rosario died in this city on July 14, 1897, leaving a last will, the eighth, ninth,
eleventh, and eighteenth clauses of which are as follows:

"Eighth. The testator declares that the 5,000 pesos which he brought to his marriage he hereby
bequeathes to his nephews Enrique Gloria y Rosario and Ramon del Rosario, natural children of his
brother Clemente del Rosario, notwithstanding the fact that they purport to be the issue of the marriage
of Escolastico Gloria and Rosendo del Rosario, successively.

"Ninth. The testator declares that the said sum of 5,000 pesos is to be divided, 3,000 pesos for the first
named and 2,000 pesos for the second named, the delivery of the said sums to be effected by the wife
of the testator, provided that these young men behave themselves as they have done up to the present
time, and do not cease to study until taking the degree of bachelor of arts, and then take a business
course, if their health will permit, their support to be paid out of the testamentary estate and they to live
in the house of the widow.

"Eleventh. The testator declares that in case the said young men should be still engaged in study at the
time of the death of the testator's wife, they shall continue to be mipported at the expense of the
testamentary estate., without deducting such expenses from their legacies, if they should desire to
continue the same studies.

"Eighteenth. The testator further states that although his wife is at the present time fifty-five years of
age, and consequently is not likely to marry again, as she herself says, nevertheless it is possible that
the opposite of what she asserts might occur, and, if so, then it is to be regarded as sufficient reason to
authorize the young men Ramon and Enrique, so often referred to, to separate from their aunt, in which
event they are to be supported by the testamentary estate on a small allowance of twenty-five pesos per
month, provided that they continue their studies or should be in poor health, this without in any respect
reducing the amount of their shares."

Don Ramon del Rosario, one of the persons mentioned in these clauses, brought this action in 1902
against Don Olemente del Rosario, the then executor, asking, among other things, that the said executor
pay him an allowance from the death of the widow of the testator at the rate of 75 pesos a month, and
that the executor allow him to live in the house in which the widow was living at that time.

The widow of the testator, Dona Honorata Valdez, died on July 7,1900.

The court below ordered judgment in respect to this allowance, and the right to live in the house as
prayed for by the plaintiff. In this we think that the court erred.

While by the eighth clause the support of the plaintiff and of Don Enrique Gloria is charged against the
estate, yet the eleventh clause makes it plain that this unconditional right was to last only during the
lifetime of the widow. After her death the right to this allowance is made to depend on the continuance
of their studies. That this is the correct construction of the will is made more plain by the eighteenth
clause above quoted. In the case of their separation from their aunt by her remarriage, they were
entitled to the specified allowance of 25 pesos a month only on condition that they were pursuing their
studies or were in poor health.

The court did not find that the plaintiff was still pursuing his studies. On the contrary, he found that the
plaintiff had fulfilled the condition by obtaining the degree of bachelor of arts in 1898.

The right to live in the house of the widow terminated at her death.

II. The seventh clause of the will of Don Nicolas is as follows:

"Seventh. The testator states that in the present condition of his affairs he has acquired, during his
married life, some tens of thousands of dollars, of which one-half belongs to his wife as her share of the
profits of the conjugal partnership, and the other half belongs to him as his share of such profits; but, in
view of the agreement entered into between the two spouses,, the property will not be partitioned, and
upon the death of the testator all the said property will pass to his wife, in order that she may enjoy the
revenue therefrom during her lifetime, but without authority to convoy any of such property, inasmuch
as she, being grateful for the benefit resulting to her, binds herself in turn to deliver said property at her
death to the testator's brothers, Don Clemente del Rosario and Don Rosendo del Rosario, and his sister,
Dona Luisa del Rosario, who shall enjoy the revenue from the said property during their respective
lives, and shall then, in turn, transmit the same to their male children, both those born in wedlock and
natural children who may be known."

This was later modified by a codicil, as follows:

"That in the seventh clause of said testament he desires and wills that in the distribution of his property
and that of his Avife among the male children of his brothers, Clemente and Rosendo del Rosario, and
those of his sister, Luisa del Rosario, in such distribution his nephews Enrique Gloria and Ramon del
Rosario must be understood to be included, in addition to the legacies mentioned in his said testament."

The thirteenth-clause of his will was as follows:

"The testator declares that in case Doiia Luisa del Rosario. should die before or after the wife of the
testator, then the legacy due her by virtue of this will shall not pass in its entirety to her male children,
except as to the sum of 1,000 pesos, the remainder to pass to Don Enrique Gloria Rosario and Don
Ramon del Rosario, natural sons of Don Clemente del Rosario, as already stated."

This was modified by the codicil as follows:

"That in the thirteenth clause the testator provided that upon the death of his sister, Luisa del Rosario,
her male children were to inherit from her up to the sum of 1,000 pesos, and this he rectifies, for better
understanding, to the effect that it is his will that the remainder of all her portion should be divided into
equal parts, one-third to go to his brother Don Clemente del Rosario and the other two-thirds to be
divided equally among his said nephews, Enrique Gloria and Ramon del Rosario."

Dona Honorata Valdez made her will three days after that of her husband. The seventh clause is as
follows:
"The testatrix declares that she institutes her beloved husband, Don Nicolas del Rosario y Alejo, as her
heir to all the property which she may have at her death, and in the unexpected case of the death of her
said husband then she institutes as heirs her brothers-in-law, Don Rosendo and Don Clemen te del
Rosario y Alejo, and her sister-in-law, Dona Luisa del Rosario, who shall enjoy the usufruct during
their lifetime of all the revenue of the said property. Upon the death of any of them, then the property
shall pass to the male children of her said brothers-in-law and sister-in-law, the issue of lawful marriage
or natural children who may be known; but upon the death of her sister-in-law, Dona Luisa, then her
share shall not pass in its entirety to her male children, except the sum of 1,000 pesos, and the
remainder shall be paid to her nephews, Don Enrique Gloria and Don Ramon del Rosario, natural
children of her brother-in-law Don Clemen te del Rosario."

Dona Luisa died one year after Don Nicolas and two years before the death of Dona Honorata, which,
as has been said, occurred on July 7, 1900.

Don Enrique Gloria died on July 6, 1900.

Don Ramon del Rosario claims in this action that he is now entitled, by virtue of both wills, to a certain
part of the share of the estates left to said Doiia Luisa during her life, and he asks that the defendant be
directed to render accounts and to proceed to the partition of the said estates. The controversy between
the parties upon this branch of the case is as follows:

The defendant claims that the plaintiff is entitled to nothing under the wills, because the gift to him was
conditional, the condition being that he should be the natural son of Don Ciemente, recognized by the
latter as such in one of the ways pointed out by the Civil Code; that he can not prove such recognition,
the parol evidence presented at the trial being prohibited by said Code, and that he has therefore not
complied with the condition.

The plaintiff claims that such evidence was proper, that both wills state that Don Ramon del Rosario is
the natural son of Don Clemente, and that in any event the bequests are made to the plaintiff by name.

The court below, holding the parol evidence immaterial, ordered judgment for the plaintiff as prayed
for.

(1) So far as the disposition of that part of the inheritance left in the aunt's will to Dona Luisa for life is
concerned, the question is free from doubt. It is distinctly declared that Ramon del Rosario and Enrique
Gloria shall take certain parts of it after 1,000 pesos have been deducted. They are pointed out by name
as the legatees. It is true that they are called the natural sons of Don Clemente. But this is merely a
further description of persons already well identified, and, if false, can be rejected in accordance with
the provision of article 773 of the Civil Code, whirl) by article 789 is applicable to legatees.

(2) The ninth clause of the will of Dona Honorata is as follows:

"The testatrix bequeaths the sum of 3,000 pesos to her nephews Enrique Gloria and Ramon del Rosario
in equal parts that is, 1,500 pesos each."

The plaintiff was entitled to one-half of this legacy in his own right. This has been paid to him. Don
Enrique Gloria died before the testatrix. By the provisions of articles 982 and 983 of the Civil Code the
right of accretion exists as to the other half in favor of the plaintiff and he is entitled to have it paid to
him.
(3) The will of Dona Honorata plainly declares that, on the death of any one of the life tenants, the male
children of such tenant shall inherit, and in respect to Dona Luisa it is expressly declared that this shall
take place whether she dies before or after the testatrix. The derecho de acrecer did not therefore exist
in favor of the other two life tenants, Don Clemente and Don Rosendo. "En la sucesion testa da es ley
preferente la voluntad del testador, de modo que este prohibiendo expresamente el derecho de acrecer,
nombrando sustitutos, o marcando el destino especial de cada porcion vacante, excluye la aplicacion de
los articulos que vamos a examinar." (7 Manresa, Comentarios al Codigo Civil, p. 276.)

This right does, however, exist in the share of Dona Luisa in favor of the plaintiff, for the reasons stated
in connection with the legacy of 3,000 pesos.

(4) We have passed upon the rights of the plaintiff to the share of Dona Luisa under the will of Dona
Honorata, because the interest is expressly left to him (en concepto de legado) as a legacy. This is
controlling. (5 Manresa, 315.)

These or equivalent words are wanting in the will of Don Nicolas. Applying article 668 of the Civil
Code, we must hold that any interest which the plaintiff may have taken in the share of Doiia Luisa
under the will of Don Nicolas he took as an heir and not as a legatee.

The distinction between the two is constantly maintained throughout the Code, and their rights and
obligations differ materially. (Arts. 660, 668, 768, 790, 858, 891, 1003.)

(5) The legatee can demand his legacy from the heir or from the executor, when the latter is authorized
to give it. (Art. 885.) The powers given to the executors by the will of Dona Honorata are contained in
the fourteenth clause, which is as follows:

"The testatrix appoints as the executors of her will, in the first place, her beloved husband, Nicolas del
Rosario y Alejo, in the second place her brother-in-law Clemente del Rosario, in the third place her
brother-in-law Rosendo del Rosario, in the fourth place Don Ramon del Rosario when he shall attain
his majority, all of them without bond and free from the obligation of terminating the administration
within the legal term. At her death they shall take possession of all such goods and things as may be her
property, and are hereby authorized fully and as required by law to prepare an inventory of said
property, and to effect the division and partition of the estate among her heirs. She also authorizes them
to execute and sign deeds of partition, sales with a resolutory condition, cancellations, receipts,
acquittances, and such other documents as may be necessary."

The twenty-first clause of the will of Don Nicolas is substantially the same. Each will prohibited any
judicial intervention in the settlement of the estates.

The clause in the will of Dona Honorata which is a copy of that in the will of Don Nicolas is as
follows:

"The testatrix declares that she expressly prohibits any judicial intervention in this her will, although
minors, absentees, or persons under disability be interested therein, as it is her wish and will that all the
proceedings be conducted extraiudieiallv, and in case a family council should be necessary, she
designates the persons who, in accordance with the provisions of the Civil Code now in force, should
form such council, or else leaves their appointment to the discretion of her executors."
If the executor was not authorized to pay these legacies, the heirs must pay them.

The life tenants and the heirs who take the remainder under these wills are numerous. If they did uot
pay the legacies and did not agree upon an administrator, judicial intervention would be necessary, the
very thing which the testators had expressly prohibited. The important power of making the partition
was attempted to be given to the. executors. In view of these considerations and a study of the whole
will, we hold that the executors are given power to pay the legacies. The action, therefore, was properly
directed against the executor so far as it related to the allowance and the legacy of 3,000 pesos. As to
these legacies, the action may be supported also under article 902, 2, which allows executors to pay
money legacies.

It was also properly directed against him, so far as it related to the share to which the plaintiff is
entitled under the will of Dona Honorata in the portion left, to Dona Luisa for life.

The provisions of articles 1025-1027 are no obstacle to this suit. That an inventory is being formed, or
that the creditors have not been paid, is a matter of defense which should have been set up in the
answer.

It was not properly directed against him in so far as it related to the similar share left to him bv the will
of Don Nicolas. He took that as heir and not aw legatee, and the heir can maintain no such action
against the executor.

The fact that the plaintiff under the will of Dona Honorata is a legatee of an aliquot part of the estate,
having become entitled to receive one-third of it on the death of Dona Luisa, does not prevent him from
maintaining this action against the executor. Though such a legatee closely resembles an heir, yet, like
all other legatees, he must seek his share from the heir or executor. ( 6 Manresa, 561.)

(6) While in this action he has a right to have his interest as legatee declared, yet it can not be delivered
to him without a partition of the estate.

It remains to be considered whether the executor has power to make the partition. Such power is
expressly given by the will. This provision is, however, void under the terms of article 1057 of the Civil
Code, which is as follows:

"The testator may, by.an act inter civos or causa mortis, intrust the mere power of making the division
after his death to any person who is not one of the coheirs.

"The provisions of this and the foregoing articles shall be observed even should there be a minor or a
person subject to guardianship among the coheirs; but the trustee must in such case make an inventory
of the property of the inheritance, citing the coheirs, the creditors, and the legatees."

Don Clemente, the executor, against whom the action was directed, was not only an heir as a life tenant
but also in fee after the death of Don Rosendo if the latter died without issue. Upon the death of the
widow, Dona Luisa then being dead, it became his duty to divide the estate into three parts, or at least
to set off the third, which was to pass to the plaintiff by the death of the widow and Dona Luisa. In this
partition he was directly interested, for, with his brother Don Rosendo, he had a life interest in the part
of the estate not set off to the plaintiff. Article 1057 prohibited an heir from being contador for this very
reason, namely, that the partition should be made impartially.
Although the executor has no power to make the partition, the heirs can do so. (Arts. 1058-1060, Civil
Code.)

The plaintiff is not bound to remain a coowner with the other heirs. Being a legatee of an aliquot part,
he has the same right to seek a partition that an heir has. (7 Manresa, 578; art. 1051, Codigo Civil.) But
in so seeking it he must make parties to his suit all persons interested in the estate (7 Manresa, 577).
This he has not done in this suit, and he consequently is not entitled to the partition ordered by the court
below.

(7) We have held that the only thing that can be decided in this case is the rights of the plaintiff as
legatee. The court below ordered the executor to render accounts of his administration of both estates.

As to the estate of Don Nicolas, the only thing here in question is the right to the allowance. As we hold
that the plaintiff is not entitled to it, he is not entitled to any statement of accounts as such pretended
legatee.

As to the estate of Dona Honorata, he is entitled to be paid a legacy of 1,500 pesos. Article 907 requires
the executor to render accounts to the heir, not to the legatee; and although by article 789 all of the
provisions of Chapter II (in which both articles are found) relating to heirs are made applicable to
legatees, we can not hold that this requires an executor to submit his accounts to one who has no
interest in the estate except to a money legacy when there is no suggestion that it will not be paid when
the right to it is established.

In respect to the share of Dona Luisa, there is reason for saying that a legatee of an aliquot part is
entitled to an accounting. But, inasmuch as in this case there can be no final determination of the rights
of the parties interested in the estate, because they are not all parties to this suit, the executor should not
in this suit be ordered to submit his accounts.

(8) The plaintiff in his complaint has limited himself to claiming the allowance, his rights to the share
of Dona Luisa, and the legacies left to him.
The question as to whether he would be entitled to any part of the share of Don Clemente upon the
latter's death, under the seventh clause of the two wills, was not presented by the complaint nor passed
upon by the court and is not before us for decision.

(9) The result of the foregoing considerations is:

The plaintiff is not entitled to any allowance under either will.

He is not entitled to live in the house No. 128 Calle Clavel.

He is entitled to be paid, under the ninth clause of the will of Dona Honorata, the sum of 1,500 pesos,
in addition to the 1,500 pesos already received under that clause.

He is entitled to the share of the estate left by the will of Dona Honorata to Dona Luisa during her life,
after deducting 1,000 pesos.

This share can not be set off to him in this suit, but only in a proceeding to which all persons interested
in the estate are parties.
His interest in the share left to Dona Luisa during her life by the will of Don Nicojas can not be
determined in this suit.

The executor can not be required to render in this suit his accounts as such executor.

The plaintiff's rights under the seventh clause of the two Avills, to the share left to Don Clemente for
life are not before us for decision.
III. After judgment had been rendered in the court below and a bill of exceptions allowed, but before
the record had been sent to this court, Don Clemente del Rosario, the defendant, died. After his death
Don Kosendo del Rosario, who was named in both wills to succeed to the executorship on the death of
Don Clemente, appeared in the court below and withdrew the appeal and bill of exceptions. Thereupon
the widow of Don Clemente, for herself and in representation of the minor son of her late husband,
asked and was granted leave to prosecute the appeal.

This ruling was correct. According to the Spanish authorities, anyone legally affected by the judgment
might appeal. According to the American authorities, if a trustee refuses to appeal, the beneficiary may
do so in his name.

That the son of Don Clemente has a direct interest in the question of the allowance of 75 pesos a month
to the plaintiff is plain. We have held that in respect to this allowance the executor represents the estate
and the judgment against him binds it.

It would be manifestly unjust to allow an executor, with perhaps only a slight personal interest in an
estate, by withdrawing an appeal, to fasten upon the estate a claim which, as we hold, it should not
bear.

IV. At the argument of this case on the merits, after the appellant had closed, the respondent made the
point for the first time that the appellant's brief contained no assignment of errors.

This is true. But a full assignment of errors is found in the bill of exceptions at pages 14 and 15. The
appellee answered the brief of the appellant without making any suggestion of this mistake. He has
been in no way prejudiced by it, and we can not affirm the judgment on this ground.

The judgment of the court below is reversed and the case remanded with directions to the court below
to enter judgment in accordance with this opinion. The costs of this instance will be equally divided
between the parties. So ordered.
[ G. R. No. 31679, January 14, 1930 ]
CELSO S. GUANCO, ADMINISTRATOR AND APPELLEE, VS. PHILIPPINE NATIONAL
BANK, OPPOSITOR AND APPELLANT.

DECISION
OSTRAND, J.:

On January 18,1921, the now deceased Espiridion Guanco obtained a credit, not exceeding P175,000,
with interest, from the Philippine National Bank, pledging as security 250 shares of the capital stock of
the Binalbagan Estate, Inc., and 6,196 shares of the capital stock of the Hinigaran Sugar Plantation, Inc.
In the following year, the Hinigaran Sugar Plantation, Inc., gave the bank a promissory note for
P273,932.11, the original debt of Guanco being included therein. Shortly afterwards, the Hinigaran
Sugar Plantation gave a mortgage on real property in favor of the Philippine National Bank for
P350,000 as security for the note and for such future credits as might be granted the company. The
shares given the bank as security for the transaction of January 18,1921, were not mentioned in the
mortgage.

After Guanco's death, the administrator of his estate, on October 5,1928, filed a petition in the intestate
proceedings asking that the Court of First Instance issue an order requiring the president or manager of
the bank to appear in court for examination in regard to the 250 shares of the Binalbagan Estate under
section 709 of the Code of Civil Procedure. The court issued the order in conformity with the
administrator's motion and ordered the manager of the bank, Miguel Cuaderno, to appear before the
court. Cuaderno did not appear, but the attorney for the bank filed an answer to the administrator's
motion in which answer it was asserted that the pledge of the 250 shares was still in force as security
for the debts of Guanco and the Hinigaran Estate. Thereupon the court, in the same proceedings and
without any trial, ordered the manager of the bank to deliver the said 250 shares to the administrator of
the Guanco Estate within thirty days from notice of the order.

Upon appeal to this court, counsel for the bank maintains that the court below exceeded its jurisdiction
in ordering the delivery of the shares to the administrator in a proceeding under section 709 of the Code
of Civil Procedure. This contention is entirely correct. The section in question reads as follows:

"Sec. 709. If an executor or administrator, heir, legatee, creditor, or other person interested in the estate
of a deceased person complains to the court having jurisdiction of the estate, that a person is suspected
of having concealed, embezzled, or conveyed away any of the money, goods, or chattels of the
deceased, or that such person has in his possession, or has knowledge of any deed, conveyance, bond,
contract, or other writing which contains evidence of, or tends to disclose the right, title, interest, or
claim of the deceased to real or personal estate, or the last will and testament of the deceased, the court
may cite such suspected person to appear before it, and may examine him on oath on the matter of such
complaint; if the person so cited refuses to appear and answer such examinations, or to answer such
interrogatories as are put to him, the court may, by warrant, commit him to jail or prison of the
province, there to remain in close custody until he submits to the order of the court; and such
interrogatories and answers shall be in writing and signed by the party examined, and filed in the
clerk's office."
As will be seen, the section quoted only provides a proceeding for examining persons suspected of
having concealed, embezzled, or conveyed away property of the deceased or withholds information of
documentary evidence tending to disclose rights or claims of the deceased to such property or to
disclose the possession of his last will and testament. The purpose of the proceeding is to elicit
evidence, and the section does not, in terms, authorize the court to enforce delivery of possession of the
things involved. To obtain the possession, recourse must therefore generally be had to an ordinary
action. It has so been held in the cases of Chanco vs. Madrilejos and Abreu (12 Phil., 543) and Alafriz
vs. Mina (28 Phil., 137).

In issuing the order from which the appeal has been taken, the court below relied largely on a dictum in
the Alafriz case that "there may be cases, where papers and documentary evidence of ownership of
property are held by a third person belonging to the estate of a deceased person, in which it would be
perfectly proper for the court to order the same turned over to the court." That may be true; it might, for
instance, apply to the possession of a Will. But in the same case, the court also said that "the court had
no right to deprive her (the appellant) of her evidence relating to the property, until the question of
ownership had been settled."

That is practically this case. The bank maintains that the pledge of the 250 shares is still in force. It may
have documentary evidence to that effect, and it was not under obligation to turn such evidence over to
the court or to a third party, on the strength of a citation under section 709. The possession of the
certificates of the shares in question is a part of that evidence and it is obvious that if they are
surrendered to the administrator of the estate and possibly disposed of by him, the bank will lose its
hold on the shares as a pledge. The bank is entitled to its day in court, and its rights can only be
determined in a corresponding action.

The appealed order is hereby reversed and annulled without costs. So ordered.