Rule 87: Actions By and Against Executors and Administrators Section 1.

Actions which may and which may not be brought against executor or administrator. No action upon a claim for the recovery of money or debt or interest thereon shall be commenced against the executor or administrator; but to recover real or personal property, or an interest therein, from the estate, or to enforce a lien thereon, and actions to recover damages for an injury to person or property, real or personal, may be commenced against him. Section 2. Executor or administrator may bring or defend actions which survive. For the recovery or protection of the property or rights of the deceased, an executor or administrator may bring or defend, in the right of deceased, actions for causes which survive. Section 3. Heir may not sue until shall assigned When an executor or administrator is appointed and assumes the trust, no action to recover the title or possession of lands or for damages done to such lands shall be maintained against him by an heir or devisee until there is an order of the court assigning such lands to such heir or devisee or until the time allowed for paying debts has expired. Section 4. Executor or administrator may compound with debtor. Within the approval of the court, an executor or administrator may compound with the debtor of the deceased for a debt due, and may give a discharge of such debt on receiving a just dividend of the estate of the debtor. Section 5. Mortgage due estate may be foreclosed. A mortgage belonging to the estate of a deceased person, as mortgagee or assignee of the right or a mortgage, may be foreclosed by the executor or administrator. Section 6. Proceedings when property concealed, embezzled, or fraudulently conveyed. If an executor or administrator, heir, legatee, creditor or other individual interested in the estate of the deceased, 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 or discloses the right, title, interest, or claim of the deceased, the court may cite such suspected person to appear before it any may examine him on oath on the matter of such complaint; and if the person so cited refuses to appear, or to answer on such examination or such interrogatories as are put to him, the court may punish him for contempt, and may commit him to prison until he submits to the order of the court. The interrogatories put any such person, and his answers thereto, shall be in writing and shall be filed in the clerk's office. Section 7. Person entrusted with estate compelled to render account. The court, on complaint of an executor or administrator, may cite a person entrusted by an executor or administrator with any part of the estate of the deceased to appear before it, and may require such person to render a full account, on oath, of the money, goods, chattels, bonds, account, or other papers belonging to such estate as came to his possession in trust for such executor or administrator, and of his proceedings thereon; and if the person so cited refuses to appear to render such account, the court may punish him for contempt as having disobeyed a lawful order of the court. Section 8. Embezzlement before letters issued If a person, before the granting of letters testamentary or of administration on the estate of the deceased, embezzles or alienates any of the money, goods, chattels, or effects of such deceased, such person shall be liable to an action in favor of the executor or administrator of the estate for double the value of the property sold, embezzled, or alienated, to be recovered for the benefit of such estate. 1|S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza Section 9. Property fraudulently conveyed by deceased may be recovered. When executor or administrator must bring action. When there is a deficiency of assets in the hands of an executor or administrator for the payment of debts and expenses of administration, and the deceased in his lifetime had conveyed real or personal property, or a right or interest therein, or an debt or credit, with intent to defraud his creditors or to avoid any right, debt, or duty; or had so conveyed such property, right, interest, debt or credit that by law the conveyance would be void as against his creditors, and the subject of the attempted conveyance would be liable to attachment by any of them in his lifetime, the executor or administrator may commence and prosecute to final judgment an action for the recovery of such property, right, interest, debt, or credit for the benefit of the creditors; but he shall not be bound to commence the action unless on application of the creditors of the deceased, not unless the creditors making the application pay such part of the costs and expenses, or give security therefor to the executor or administrator, as the court deems equitable. Section 10. When creditor may bring action. Lien for costs. When there is such a deficiency of assets, and the deceased in his lifetime had made or attempted such a conveyance, as is stated in the last preceding section, and the executor or administrator has not commenced the action therein provided for, any creditor of the estate may, with the permission of the court, commence and prosecute to final judgment, in the name of the executor or administrator, a like action for the recovery of the subject of the conveyance or attempted conveyance for the benefit of the creditors. But the action shall not be commenced until the creditor has filed in a court a bond executed to the executor or administrator, in an amount approved by the judge, conditioned to indemnify the executor or administrator against the costs and expenses incurred by reason of such action. Such creditor shall have a lien upon any judgment recovered by him in the action for such costs and other expenses incurred therein as the court deems equitable. Where the conveyance or attempted conveyance had been made by the deceased in his lifetime in favor of the executor or administrator, the action which a credit may bring shall be in the name of all the creditors, and permission of the court and filing of bond as above prescribed, are not necessary.

P AU LA V . E CS A Y RUFINA C. DE PAULA, in her capacity as Adminisrtatrix of the Intestate Estate of the late VICTOR GASTON, petitioner, vs. JOSE ESCAY, ET AL., respondents.1955 Sep 281st DivisionG.R. No. L-8559D E C I S ION

LABRADOR, J.: This is a special civil action of certiorari instituted in this Court, seeking to annul an order of the Court of First Instance of Negros Occidental, the Honorable Jose Teodoro, Sr., presiding, approving the claim of respondent Jose Escay in the amount of P5,418.31 plus legal interest of P2,682.06 and P810.03 as attorney's fees and approving its payment by the administratrix out of the funds of the estate. The claim arose out of a contract of lease between claimant Jose Escay as lessee of Hacienda Puyas No. 1, and the administratrix as lessor. This contract of lease was executed on May 12, 1937, with the court's approval, and amended on April 29, 1942, also with the court's approval. Under the original contract of lease (Exhibit A of Annex A), the administratrix was obliged to deliver to Escay ten per cent of the sugar, rice and corn produced from Hacienda Puyas No. 1 from 1943 until the full sum of P7,000, the estimated cost of property transferred to the estate, was fully covered. In the subsequent amendment of the contract, the lease was declared terminated with the close of the 1942-43 harvest, with the right on the part of

either party to demand a liquidation of the accounts in relation to the lease one year after the reestablishment of the peace. Pursuant to the above agreement, Jose Escay filed his claim on June 29, 1954, attaching thereto a copy of the contract of lease and a detailed statement of accounts showing that the administratrix is indebted to him in the sums of P5,418.31 as principal and P2,682.06 as interest. The administratrix opposed the claim on the following grounds, namely, (1) that it can not be presented as a claim because the administration proceedings were commenced since 1932 yet and the claim can not now be presented as one under section 5 of Rule 87 of the Rules of Court; and (2) that the court sitting in probate has no jurisdiction to entertain the claim, especially as the same is being controverted. The lower court held that the claim was properly filed (under the authority of III Moran, Comments on the Rules of Court, pp. 393-94 and the case of Escueta vs. Sy Juilliong, 5 Phil., 405). As to the contention that the claim is not chargeable against the estate but against the administratrix in her personal capacity because there is an over payment of rentals, the trial court held that as the contract of lease was approved by the court and the claim is an offshoot of said contract, she may not now repudiate it. As to the claim that the administratrix had not been given opportunity to contest the correctness of the claim, the court held that the administratrix had not offered to disprove the items contained in the statement of accounts. The first legal issue submitted to us for resolution is the supposed lack of authority or jurisdiction on the part of the court to consider the claim in the administration proceedings. There is no question that the claim does not fall under the provisions of section 5 of Rule 87 of the Rules of Court, because the same is not a debt or money claim incurred by the deceased during his lifetime and collectible after his death. It is an ordinary demand or claim for the payment of the balance of an account due under a contract of lease entered into by the administratrix under the court's approval. There is no express provision of the Rules governing the method by which the demand for payment may be made. May the claim be enforced by a simple motion in the administration proceedings, or by an ordinary action? Under our judicial system, there is only one grade of court of general jurisdiction invested with power to take cognizance of all kinds of cases, whether civil or criminal, or all kinds of special proceedings, whether probate, or land registration, or naturalization. In the same grade, we have the Court of Industrial Relations and the Agrarian Court, but these are courts of limited jurisdiction. We do not have probate courts dedicated to the trial of probate cases alone; our courts of first instance have jurisdiction of probate proceedings, such as administration and distribution and guardianship, jointly with the civil or criminal actions, and when taking cognizance of probate cases they do not hold court or sessions at specified places, or periods, or terms, and their power over the same is not separate and distinct, as is the case in common law countries where the same court may at one time sit as a court of common pleas, at another as a probate court, and still at another as a court of claims. As a result the practice has been for demands against administrators (not by those against third parties) to be presented in the court of first instance where the special proceeding of administration is pending, if the demand has relation to an act of administration and in the ordinary course thereof. This is because the administration is under the direct supervision of the court and the administrator is subject to its authority. When the demand is in favor of the administrator and the party against whom it is enforced is a third party, not under the court's jurisdiction, the demand can not be by mere motion by the administrator, but by an independent action against the third person. For obvious reasons, the demand can not be made because third persons not under the jurisdiction of the court are involved. From the above considerations, it can be seen, in the case at bar, that as the lease contract was entered into by the administratrix with the approval of the court in the ordinary course of administration and with the court's approval in the administration proceedings, to consider the claim in the same administration proceedings may not be denied for the claim purpose to make the administratrix comply with the obligations contracted in the course of administration with the court's consent and approval. There is no question that the court has jurisdiction of the administrator in so far as the property and the 2|S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

contract are concerned; as to the movant, he submitted himself to the court's jurisdiction by filing his claim. The claimant is not prohibited from filing an independent action to recover the claim, but the existence of such a remedy is not a bar to the remedy that he had pursued in the case at bar. The objection of the administratrix to the presentation of the claim before the court may have been impelled by the belief that the amounts she may be compelled to pay by virtue of the demand of Escay may be charged against the estate, when the same should fall under her personal responsibility. She was entitled to receive only the amount of the rentals under the lease contract and no more, and Escay should not make the estate under administration responsible for the amount received by the administratrix in excess of the rentals actually due. The consideration of the claim in the administration proceedings, however, does not necessarily mean that the administratrix may not be held personally liable for the excess. The mere fact that the court in passing upon the claim may order her, the administratrix, to pay the full amount of the demand, does not mean that the total amount which she is compelled to pay could be chargeable against the said estate under administration. Certainly, the estate would only be responsible for the amount which she is legally entitled to receive as rentals; it can not be held responsible for the excess of the amount collected over and above the rentals due under the lease. For this excess the administratrix will have to be personally responsible and the court in ordering payment of the said excess would order the administratrix to be personally responsible therefor. The above circumstances, however, do not deprive the court of power to consider the claim; and the administratrix for herself is estopped from denying that the amounts received in excess of the true rentals were received by her In such capacity. One who contracts with another in a representative capacity cannot claim that amounts received by her in said representative capacity are due from her in another capacity (Arnold vs. International Banking Corporation, 50 Phil., 477; Kellerman vs. Miller [1897] 5 Pa. Super. Ct. 443 and Magee vs. Mellon [1852] 23 Miss. 585, cited in 64 A. L. R. 1558-1559; In re Glover, 29 S. W. 982). Insofar as the correctness of the amounts stated in the claim or demand, we find that the administratrix never offered to disprove the amounts stated in the claim. Notwithstanding the fact that the account is itemized to the last detail, with a description of the methods by which payment were made, only a general denial was made which is not even under oath. The administratrix should have indicated the items the truthfulness or correctness of which she wanted to deny. There was in fact, therefore, no valid denial of any item and all the items were deemed admitted. It must be taken into account that the present action is one of certiorari, based on lack or excess of jurisdiction and/or abuse of discretion. Under these circumstances, we are constrained to find that the court did not abuse its discretion in approving the claim, there being no specific denial of any of the items of the claim or specific offer of proof by her of the incorrectness of any of the items of the claim. In view of the foregoing considerations, the petition should be as it hereby is denied. With costs against the petitioner. Bengzon, Acting C.J., Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo, Concepcion and Reyes, J.B.L., JJ., concur. B AYO T V . ZU R B IT O PATROCINIO BAYOT, as administratrix of the intestate estate of Francisco Ma. Bayot, plaintiff-appellant, vs. LUCAS ZURBITO, as administrator of the intestate estate of Gaspar Zurbito, defendant-appellee.1919 Feb 28En BancG.R. No. 13124D E C I S I O N

STREET, J .:

This is an action to recover a sum of money, and the plaintiff appeals from the action of the Court of First Instance sustaining a motion to dismiss, based on the ground that the matter in controversy had been determined in a former action. The plaintiff Patrocinio Bayot, is the administratrix of the estate of her deceased father, Francisco Ma. Bayot, formerly a merchant in Masbate, who died intestate many years ago. The defendant, Lucas Zurbito, is the administrator of the estate of his father, Gaspar Zurbito, who also died several years ago, but subsequent to the death of Francisco Bayot. The claim sued on in this case consists of a debt for P9,694.52, with interest from August 9,1907. It is alleged to consist of the balance of an account current, as shown upon the books of Francisco Bayot, resulting from mercantile operations sustained between the latter and Gaspar Zurbito, during a period of several years prior to the death of Bayot. The claim in question in this suit was presented by the plaintiff to the committee in the estate of Gaspar Zurbito and was allowed by the committee as a just debt, but upon appeal to the Court of First Instance it was held that the action could not be maintained inasmuch as the plaintiff has previously exhibited this debt by way of set-off against another claim presented by Zurbito against the estate of the plaintiff's intestate. In this connection it appears that on April 8, 1907, Gaspar Zurbito presented a claim for P53,602.76 to the committee acting in the estate of Francisco Bayot. The facts concerning this claim need not be set out in detail, it being sufficient to say that, according to Zurbito, Bayot had become indebted to Zurbito's father while the former was acting as manager or administrator of a cattle ranch belonging to the latter. Said claim was disallowed by the committee on claims of the Bayot estate as being wholly without any merit whatever. An appeal was promptly taken by Zurbito to the Court of First Instance, which court also disallowed the claim, and upon appeal to the Supreme Court the judgment of the Court of First Instance was affirmed. (Zurbito vs. Bayot, R.G. No. 6567). Meanwhile Gaspar Zurbito, the original proponent of the claim above mentioned, had died and had been succeeded by the defendant, Lucas Zurbito, in the character of his administrator. When the claim of Gaspar Zurbito was presented to the committee in the estate of Francisco Bayot, as above stated, the present plaintiff, as administratrix of Bayot, denied liability and asked that judgment be given in favor of the estate of Francisco Bayot upon the indebtedness which is the subject of the present action. The committee, however, considered that, inasmuch as the Zurbito claim was disallowed, it had no jurisdiction to allow the claim in favor of the Bayot estate. The committee accordingly made the following report: "With regard to the counterclaim of the administratrix Doa Patrocinio Bayot, this commission understands that it is not authorized by law to take jurisdiction of this counterclaim after the claim presented by Don Gaspar Zurbito has been disallowed. Therefore, it is sent to the Court of First Instance of this subprovince of Masbate for determination." As already stated, an appeal was taken in behalf of Gaspar Zurbito from the action of the committee in rejecting his claim, but no formal appeal was taken in behalf of the administratrix of Francisco Bayot. However, in the Court of First Instance, the administratrix set out in her answer this same indebtedness and asked for judgment thereon. The trial court considered that the action taken by the committee was in effect a disallowance of the debt and that by failing to appeal the administratrix had placed herself in a position where judgment could not be given in her favor. The counterclaim was accordingly dismissed, and the administratrix brought the matter by cross-appeal to this court in the same cause in which the appeal of Zurbito was prosecuted; but this court also decided against her. The first observation to be made upon the case as thus presented is that the committee on claims in the estate of Francisco Bayot was in error in assuming that it had no authority to allow the claim which was exhibited by the administratrix by way of set-off. The provision upon which the committee based its action is found in the last clause of Section 696 of the Code of Civil Procedure, which declares that "the 3|S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

committee shall have no jurisdiction over claims in favor of the estate, except as offsets to claims presented against the estate." From this provision the committee evidently inferred that if the principal claim is not allowed the authority to allow the set-off falls to the ground. This cannot be accepted as a correct interpretation of that provision. A creditor who presents a claim against an estate submits himself to the jurisdiction of the committee, and the circumstance that his claim is found to be without merit in no wise defeats the authority of the committee to allow the set-off against him. In Stearns vs. Stearns (30 Vt., 213), the plaintiff exhibited a demand against an estate; and the administrator exhibited notes in offset to them. Upon trial in the court where the case went by appeal nothing was found due the plaintiff upon his demand, yet it was held that the estate was entitled to a judgment upon the offset exhibited by the administrator. In Bliss vs. Little (63 Vt., 86), it was insisted that it is only when there is a valid claim against the estate that the administrator is bound to exhibit claims in favor of the estate. This contention was rejected, the court observing that if the argument in question was sound, it would necessarily follow that an administrator would in no case be bound to exhibit claims of an estate in offset until the validity of the creditor's demand was established, which clearly is not the meaning of the statute. These decisions are instructive, inasmuch as they have reference to the very provision of the Vermont Statutes from which section 696 of our Code of Civil Procedure has been taken. The next point to be considered is whether the disallowance of the present claim by the committee in the estate of Francisco Bayot and the final disposition made of the matter upon appeal to this Court operate as a bar to the present action. Upon this point it is very plain that the decision in that case does not exhibit the requisites essential to create the bar of res judicata. As was said in Hughes vs. United States (4 Wall., 232; 18 L. ed., 303); "in order that a judgment may constitute a bar to another suit, it must be rendered in a proceeding between the same parties, or their privies, and the point of controversy must be the same in both cases, and must be determined on the merits." In accordance with this doctrine, it was held in Smith vs. McNeal (109 U.S., 426; 27 L. ed., 986), that a judgment dismissing a cause for want of jurisdiction does not conclude the plaintiff's right of action. Any number of decisions might be cited in support of this proposition; and its applicability to the case before us cannot be doubted. The action of the committee on claims in the estate of Francisco Bayot was expressly based upon the idea that the jurisdiction of the committee to allow the set-off in favor of said estate was destroyed by the disallowance of the principal claim presented by Zurbito against the Bayot estate; and the Court of First Instance merely held, as this court also held, that the claim could not be allowed in the Court of First Instance because no appeal had been taken. In neither tribunal was any consideration paid to the merits of the claim; and no court has ever passed upon this point. But it is said that the action of the committee in disallowing the claim for want of jurisdiction was misconceived and that the committee ought to have considered the claim on its merits and given judgment in favor of the Bayot estate if the facts had been found to support the claim. From this it is argued that the action of the committee has the same effect as if the claim had been considered on its merits. In our opinion this suggestion is not well founded. Not only does there appear to be no authority in support of the proposition that a judgment dismissing a case for want of jurisdiction will have the effect of a judgment upon the merits, if it be shown that the tribunal did in fact have jurisdiction; but on the contrary the authorities show that a person who relies on a former judgment as a conclusive adjudication of any controversy must take the prior judgment for what it appears to be on its face; and if it is not a judgment on the merits, it does not conclude the right of action. This point came under consideration in Wanzer vs. Self (30 Ohio St., 378), where the judgment relied upon as res judicata contained the reservation "without prejudice." It was argued that the insertion of these words in the judgment was erroneous and unwarranted and that as the case had been in fact tried upon the merits the judgment must be considered as a conclusive bar to another action. Said the court:

"The actual judgment rendered does not appear to be one that is conclusive of the merits of the case. To give it the effect of such a judgment would not only create that which does not exist, but might work a great wrong to the plaintiff by finally determining a just cause of action which the court did not adjudge against him, and by misleading him to acquiescence in a judgment from which he would have appealed had it been regarded as conclusive. . . . The judgment is an entirety, and if it has any validity, it must stand as rendered. . . . Upon that judgment the party must stand, and, being without prejudice to a future action, it is not a bar to the action to which it was pleaded" (80 Ohio St., 881, 382). What has been said shows that the former proceeding has created no technical bar to the maintenance of the present action. But a further obstacle is supposed to be found in Section 696 of the Code of Civil Procedure. The first paragraph of this section makes it the duty of an administrator to exhibit all claims in favor of his decedent as an offset against any claim presented by a creditor of the estate. The first part of the second paragraph of the same section reads as follows: "Claims in favor of the estate and against a creditor who presents a claim for allowance against the estate shall be barred, unless so presented by the executor or administrator as an offset." This provision undoubtedly means not only that the executor or administrator should present any claim in favor of the estate as an offset where a creditor presents a claim against the estate but that he should prosecute it with effect. In other words the statute clearly intends that the sole remedy of the executor or administrator shall be in that proceeding. From this it would appear to follow as a necessary consequence that, by failing to appeal from the action of the committee disallowing the claim now sued on, the plaintiff herein has lost all remedy, and cannot now maintain an independent action. This idea seems to be implicit in the opinion written by Justice Moreland in Zurbito vs. Bayot [supra]. Nevertheless, what was really decided in that case is that, by failing to appeal from the action of the committee, the plaintiff was precluded from relying on this claim as an offset in the Court of First Instance in that proceeding. The court was not called upon to decide whether an independent action could be maintained. Now that we are called upon to decide this point, it is necessary to take account of another provision of law the effect of which has not been so far considered. Section 696 of the Code of Civil Procedure, part of which is quoted above, is contained in Chapter XXXVIII of said Code. The final section of this same Chapter, in the part here material to be noted, reads as follows: "SEC. 701. An Executor or Administrator may sue. - Nothing in this chapter shall prevent an executor or administrator from commencing and prosecuting an action commenced by the deceased in his lifetime, for the recovery of a debt or claim, to final judgment, . . .." Upon examination of the language of this provision, it will be seen that the word "commencing" is interpolated in a rather awkward manner into a statement which deals principally with the continued prosecution of actions already begun by the deceased in his lifetime. Nevertheless, the meaning of the entire provision is clear; and it evidently recognizes the right of an executor or administrator, not only to continue the prosecution of an action already begun, but also to institute an action upon a cause which accrued in the lifetime of the deceased but which had not been made the subject of action by him. This of course supposes that the cause of action is such as to have survived to the estate. (Section 703, Code of Civ. Proc.) In other words, it is apparent that there is an ellipsis in the text of Section 701 after the word "commencing" in the second line, and the full meaning of the provision can only be brought out when this ellipsis is applied by a process of construction, somewhat as follows:

"Nothing in this chapter shall prevent an executor or administrator from commencing and prosecuting an action, or from prosecuting an action already commenced by the deceased in his lifetime, for the recovery of a debt or claim to final judgment." No other interpretation could be adopted which would give any effect whatever to the word "commencing," as used in Section 701; and that this is its true meaning is proved by comparing said section with Section 2443 of the Statutes of Vermont (1894), from which Section 701 was copied almost verbatim by the author of the Code of Civil Procedure. This section, as it exists in the Vermont Statutes, reads as follows: "Nothing in this chapter shall prevent an executor or administrator from commencing and prosecuting an action by attachment, or otherwise, or from prosecuting an action commenced by the deceased in his lifetime, for the recovery of a debt or claim to final judgment." The obvious-explanation of the ellipsis noted in Section 701 is that the eye of the copyist skipped from the word "prosecuting," at the end of the second line as the section is printed in the Vermont Statutes, to the same word at the end of the next line. Fortunately the error is not such as to destroy the sense of the provision. It is thus seen that Section 701 supplies general authority for the institution of an action by an executor or administrator upon any claim, in the nature of a debt, which accrued in the lifetime of the decedent; and the exception made in the opening words of Section 701 is such as to give absolute precedence to the rule therein expressed over anything to the contrary in Section 696 or any other part of chapter 38. In other words the provisions of Section 701 necessarily overrule so much of section 696 as purports to bar absolutely all claims in favor of an estate which are not made effective as offsets. Of course the provision that the executor or administrator shall present all claims in favor of the decedent as offsets to hostile claims presented against the estate is unaffected by this decision, but it remains in force as a directory provision only. The propriety of this conclusion is supported by consideration of the fact that so much of Section 696 as purports to operate as an absolute bar is of a highly penal nature. It tends to the destruction of rights and takes away from the executor or administrator a privilege which the law concedes to all other litigants, namely, the right to elect between presenting a claim as an offset and making it the subject of an independent proceeding, that is to say, in those cases where the claim in question constitutes an independent cause of action. This provision should therefore be interpreted in the mildest possible sense; and in case of conflict between Sections 696 and 701, it is the duty of the court to apply the more benevolent provision. This consideration is of course entirely apart from the express reservation made in the opening words of Section 701. Our conclusion is that the claim on which this action is based is not barred by the failure of the plaintiff to prosecute it with effect as an offset in the former proceeding; and inasmuch as the judgment entered in that proceeding cannot, for reasons already stated, be considered binding as res judicata, the result is that the plaintiff is entitled to be heard on the merits in this action. The judgment is accordingly reversed, and the cause is remanded to the court of origin with directions to proceed to a trial of the cause on the merits. No express adjudication of costs will be made. Arellano, C.J., Torres, Johnson, Araullo, Avancea and Moir, JJ., concur. Malcolm, J., took no part in the consideration or disposition of this case. CAB U Y AO V . CA AGB A Y

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and 1 2 _C ha Mendoza

DAMASO CABUYAO, plaintiff-appellant, vs. DOMINGO CAAGBAY, ET AL., defendants-appellees.1954 Aug 2En BancG.R. No. L-6636D E C I S I O N

CONCEPCION, J.: This is an appeal from an order of the Court of First Instance of Quezon dismissing civil case No. 5308 of said court. It appears that said case was instituted on April 9, 1952. In the original complaint, plaintiff-appellant Damaso Cabuyao alleged that he is the "lone compulsory heir" of the spouses Prudencio Cabuyao and Dominga Caagbay, who died leaving the eleven (11) parcels of land therein described, and that, although plaintiff had adjudicated said properties to himself pursuant to section 1 of Rule 74 of the Rules of Court, the corresponding transfer certificates of title could not be issued in his name because the original owner's duplicate certificates were being withheld by the defendants, Domingo Caagbay and Eugenio Caagbay, who had also taken possession of said parcels of land, and would continue unlawfully using the same and committing acts of dispossession thereof, unless enjoined by the court. Hence, he prayed that a writ of preliminary injunction be issued against the defendants and that, thereafter, judgment be rendered; (a) sentencing them to vacate said lands, to turn them over to the plaintiff, and to indemnify him in the sum of P4,000; (b) "removing clouds and quieting title of the plaintiff" over said properties; and (c) ordering the defendants to surrender to him or to the Register of Deeds the aforesaid owner's duplicate certificates of title and, should they fail to do so, to order the cancellation thereof and the issuance of the corresponding transfer certificates of title in favor of the plaintiff. On April 21, 1952, defendants filed a motion to dismiss for lack of "jurisdiction over the subject-matter," the original complaint being entitled "Unlawful Entry and Detainer." By an order, dated April 29, 1952, plaintiff was required to file an amended complaint, stating therein the date on which the defendants had seized the properties in dispute and their grounds therefor. On April 30, 1952, plaintiff moved for the admission of an amended complaint, which excluded Eugenio Caagbay as party defendant, and included, as such, Vicente, Ireneo, Antonio, Emilio, Aurea and Feliza, all surnamed Caagbay. Stating that plaintiff's counsel was "converting this simple case into a complicated one", the court, by an order dated June 4, 1952, granted plaintiff another five (5) days within which "to file an amended complaint, in accordance with section 3, Rule 17 of the Rules of Court," setting forth the data required in the order of April 29, 1952. In compliance therewith, plaintiff filed, on June 12, 1952, an amended complaint, which the defendants sought to be dismissed upon the ground that "plaintiff has no legal capacity to sue," there being no allegation that "plaintiff had been judicially declared lone compulsory heir" of the deceased spouses Prudencio Cabuyao and Dominga Caagbay. On motion of the defendants, dated July 5, 1952, the court issued, on July 22, 1952, an order dismissing the case, with costs against the plaintiff, for the reason that, "under the facts and circumstances of this case, as disclosed by the pleadings, no action can be maintained until a judicial declaration of heirship has been legally secured." Soon later, or on August 1, 1952, plaintiff moved for the reconsideration of said order of July 22, 1952, and for the admission of another amended complaint thereto attached. In this pleading, plaintiff alleged that he owns the parcels of land above-mentioned, having acquired the same by inheritance from his parents, Prudencio Cabuyao and Dominga Caagbay, who died on April 8, 1919 and August 14, 1944, respectively; that despite the above mentioned extrajudicial adjudication of said properties made by plaintiff in his favor, as the "only issue and/or successor" of his aforementioned parents, pursuant to section 1 of Rule 74 of the Rules of Court, the corresponding transfer certificates of title could not be issued in his name, the owner's duplicate of the original certificates of title having been taken by the defendants, who are nephews and nieces of the deceased Dominga Caagbay, except defendant Domingo 5|S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

Caagbay, who is her brother; that, upon the death of Dominga Caagbay on August 14, 1944, the defendants took possession of the lands in dispute and have continuously enjoyed the fruits and rents thereof, aggregating P4,000; and that the defendants will continue unlawfully exercising and/or claiming ownership over said properties and violating plaintiff's dominical rights, unless a writ of injunction be issued against them. The prayer in the last amended complaint reads: "WHEREFORE, it is hereby respectfully asked that a preliminary injunction be issued against the defendants, their representatives, tenants, or any other person receiving instructions from them or acting in their behalf prohibiting them from re-entering the lands above-described or collecting the fruits thereof, for which purpose plaintiff is willing and ready to file corresponding bond, and, after due hearing, judgment be rendered: (a) removing clouds and quieting the title of the plaintiff over the properties in question and ordering the defendants to vacate and restitute said properties to the herein plaintiff; (b) ordering said defendants, jointly and severally to pay the herein plaintiff the amount of Four Thousand Pesos (P4,000.00) as damages; (c ) ordering the defendants to surrender to the Register of Deeds of the province, or to herein plaintiff the titles of the lands above- described and, in case of failure to do so to order the cancellation of said titles and to issue corresponding duplicates in the name of the herein plaintiff, upon payment of the corresponding fees; and to pay costs of this suit. PLAINTIFF, prays for any other relief or remedy just and equitable in the premises." Attached to said pleading was plaintiff's affidavit of extrajudicial adjudication (Exhibit A), as well as the documents appended thereto, namely: the death certificate of Prudencio Cabuyao (Annex A); the certificate of burial of Dominga Caagbay (Annex B); and the baptismal certificate of plaintiff Damaso Cabuyao (Annex C). In said Exhibit A, plaintiff declared that he was born in Tayabas on December 13, 1896, "the only child or heir of the spouses Prudencio Cabuyao and Dominga Caagbay," both deceased, and that said spouses owned the real properties in question, and left no debts whatsoever, and prayed that the corresponding transfer certificates of title be issued in his name. It appears from Annex A, that Prudencio Cabuyao, married to Dominga Caagbay, died on April 8, 1919 and was buried in Tayabas, Quezon, the next day. Annex B shows that Dominga Caagbay, widow of Prudencio Cabuyao, was buried in Tayabas, Quezon, on August 5, 1944. Annex C, states that Damaso Cabuyao, the legitimate son of Prudencio Cabuyao and Dominga Caagbay, who were lawfully married, was born on December 10, 1896, and was christened by the parish priest of San Miguel Arcangel, Tayabas, province of Quezon, on December 13, 1896. Defendants objected to said motion for reconsideration and to the admission of the amended complaint and, on August 6, 1952, the court issued the following: ORDER "After considering plaintiff's motion for the reconsideration of the order of July 22, 1952, and the admission of the amended complaint thereto attached and defendant's opposition thereto, this Court has arrived at the conclusion that said motion should be, as it is hereby, DENIED for lack of merit. As stated in the order of the reconsideration of which is prayed, it is impossible for plaintiff to maintain the action in this case because he and the party defendants alleged to be the heir of the same decedents and there has been no showing that they have been judicially declared as heir of the deceased. Once the question of who are the heirs is determined, it may not be necessary for the plaintiff to file the complaint in this case." (Amended Record on Appeal, pp. 49-50.)

Plaintiff has appealed to this Court, and now he contends: "I. That the court below erred in sustaining the motion to dismiss dated July 15, 1952. II. That the court below erred in holding that `in this case no action can be maintained until a judicial declaration of heirship has been legally secured.' III. That the court below erred in denying the motion for reconsideration dated July 21, 1952, and in not giving due course to the second amended complaint." (Brief for appellant, p. 3.) In the pleadings in question, it is alleged and, in the orders and briefs before us, it is not denied, that the lands in dispute belongs originally to the spouses Prudencio Cabuyao and Dominga Caagbay, who were legally married; that plaintiff Damaso Cabuyao is their "lone" legitimate child; and that the defendants are nephews and nieces of Dominga Caagbay, except of Defendant Domingo Caagbay, who is her brother. The only question for determination before us is whether, under the foregoing facts, which, for purpose of this appeal, must be assumed to be true, plaintiff has a cause of action to recover the properties in dispute and to quiet his alleged title thereto. The defendants maintain, and the lower court held, that plaintiff's alleged right to succeed the deceased must be settled by a judicial declaration to such effect before said cause of action could be asserted in his favor. This view is, however, in conflict with the law and with a rule well established in our jurisprudence. Section 1 of Rule 74 of the Rules of Court reads: "If the decedent left no debts and the heirs and legatees are all of age, or the minors are represented by their judicial guardians, the parties may, without securing letters of administration, divide the estate among themselves as they see fit by means of a public instrument filed in the office of the register of deeds, and should they disagree, they may do as in an ordinary action of partition. If there is only one heir or one legatee, he may adjudicate to himself the entire estate by means of an affidavit filed in the office of the register of deeds. It shall be presumed that the decedent left no debts if no creditor files a petition for letters of administration within two years after the death of the decedent." ( mphasis supplied.) Pursuant thereto, plaintiff's affidavit of extrajudicial adjudication in his favor sufficed to settle the estate in question, if the following conditions are present, namely: (a) that the decedents left no debts and (b) that the heirs and legatees are all of age, or the minors are represented by their judicial guardians. The presence of the first requirement is presumed, no creditor having filed a petition for letters of administration within two (2) years after the death of the decedents. The allegations of the original and the amended complaints - which, for the purpose of this appeal, should be regarded as true - show that plaintiff is the sole heir of the decedent, that he is of age, and that the second requirement is, likewise, present. Hence, plaintiff can not be denied the full force and effect of the provision above quoted. Moreover, the Spanish Civil Code, which was in force when the events material to the issue before us took place, provided: "ART. 657. The rights to the succession of a person are transmitted from the moment of his death. "ART. 661. Heirs succeed to all the rights and obligations of the decedent by the mere fact of his death." Thus, as early as 1904, this Court entertained, in the case of Mijares vs. Nery (3 Phil., 195), the action of an acknowledged natural child to recover property belonging to his deceased father - who had not been survived by any legitimate descendant - notwithstanding the absence of a previous declaration of heirship in favor of the plaintiff, although the latter's claim did not prosper for it was predicated upon 6|S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

the theory that the defendant - as illegitimate children of the deceased pursuant to the laws of Toro, which were in force at the time of their birth - had no right to succeed their common father, and such pretense was not sustained, the latter having died after the promulgation of the Civil Code of Spain, under the provisions of which said defendants were, likewise, acknowledged natural children, and, as such, had the same rights as the plaintiff. The right to assert a cause of action as an alleged heir, although he has not been judicially declared to be so, has been acknowledged in a number of subsequent cases. "The property of the deceased, both real and personal, became the property of the heir by the mere fact of death of his predecessor in interest, and he could deal with it in precisely the same way in which the deceased could have dealt with it, subject only to the limitations which by law or by contract were imposed upon the deceased himself. . . ." (Suiliong & Co. vs. Marine Insurance Co., Ltd. et al., 12 Phil., 13, 19.) "Claro Quizon died in 1902. It was proven at the trial that the present plaintiffs are the next of kin and heirs, but it is said by the appellant that they are not entitled to maintain this action because there is no evidence that any proceedings have been taken in court for the settlement of the estate of Claro Quison, and that, without such settlement, the heirs can not maintain this action. There is nothing in this point. As well by the Civil Code as by the Code of Procedure, the title to property owned by a person who dies intestate passes at once to his heirs. Such transmission is, under the present law, subject to the claim of administration and the property may be taken from the heirs for the purposes of paying debts and expenses, but this does not prevent the immediate passage of the title, upon the death of the intestate, from himself to his heirs. Without some showing that a judicial administrator had been appointed in proceedings to settle the estate of Claro Quison, the right of the plaintiffs to maintain this action is established." (Quison vs. Salud, 12 Phil., 109, 113-114.) "It is alleged in the complaint that the plaintiff, Silvestra Lubrico, is an only child, and therefore the sole general heir of the original owners of the property, and no proof was offered at the trial to show that there was any other descendant entitled to succeed besides the plaintiff, who, on her part, has shown herself to be the legitimate daughter of the late Guillermo Lubrico and Venancia Jaro. If heirs succeed the deceased by their own right and operation of law in all his rights and obligation by the mere fact of his death, it is unquestionable that the plaintiff, in fact and in law, succeeded her parents and acquired the ownership of the land referred to in the said title, by the mere fact of their death. (Arts 440, 657, 658, 659, and 661, Civil Code.) Even in the event that there should be a coheir or a coowner of the parcel of land in question, once the right of the plaintiff, and consequently her personality, has been proven the defendant has no right to dispute them, . . ." (Lubrico vs. Arbado, 12 Phil., 391, 396- 397.) "There is no legal precept or established rule which imposes the necessity of a previous legal declaration regarding their status as heirs to an intestate estate on those who, being of age and with legal capacity, consider themselves the legal heirs of a person, in order that they may maintain an action arising out of a right which belonged to their ancestor." (Hernandez vs. Padua, syllabus, 14 Phil., 194.) See, also, Inocencio vs. Gat-Pandan, 14 Phil., 491; Sy Joc Lieng vs. Sy Quia, 16 Phil., 137; Aliasas vs. Alcantara, 16 Phil., 489; Irlanda vs. Pitargue, 22 Phil., 383; Castillo vs. Castillo, 23 Phil., 364; Nable Jose vs. Uson, 27 Phil., 73; Beltran vs. Soriano, 32 Phil., 66; Bona vs. Briones, 38 Phil., 276; Uy Coque vs. Navas L. Sioca, 45 Phil., 430; Fule vs. Fule, 46 Phil., 317; Orozco vs. Garcia, 50 Phil., 149; Gibbs vs. Gov't of the P. I., 59 Phil., 293; Mendoza Vda. de Bonnevie vs. Cecilio Vda. de Pardo, 59 Phil., 486; Lorenzo vs. Posadas, 64 Phil., 353; Gov't. vs. Serafica, 33 Off. Gaz., 334; De Vera vs. Galauran, 67 Phil., 213; and Cuevas vs. Abesamis, 71 Phil., 147.

In view of the foregoing, the order appealed from is hereby reversed, and let the record of this case be, as it is hereby, remanded to the court of origin for further proceedings not inconsistent with this decision, with costs against the defendants- appellees. It is so ordered. Paras, C.J., Pablo, Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo, Labrador and Reyes, J.B.L., JJ., concur. MAR AB ILLES V . Q U I T O SEVERINA MARABILLES, ET AL., plaintiff and appellants, vs. ALEJANDRO QUITO and AIDA QUITO, defendants-appellees.1956 Oct 18En BancG.R. No. L-10408D E C I S I O N

daughter Aida, a co-defendant, had been declared heirs or administrators of the estate of the deceased. Because of this legal deficiency, the court has concluded that plaintiffs have no cause of action against defendants because there is no legal bond by which the latter may be linked with the property. This conclusion is also erroneous. The rule is that, to determine the sufficiency of a cause of action on a motion to dismiss, only the facts alleged in the complaint should be considered, 1 and considering the facts herein alleged, there is enough ground to proceed with the case. Thus, it appears in the complaint that Guadalupe Saralde is the wife of Alejandro Quito, the defendant, and as said Guadalupe has already died, under the law, the husband and his daughter Aida are the legal heirs. We have already said that in order that an heir may assert his right to the property of a deceased, no previous judicial declaration of heirship is necessary. It was therefore a mistake to dismiss the complaint on this ground. Lastly, the lower court found that the action of the plaintiffs had already prescribed because the 4-year period within which an action based on fraud may be brought had already elapsed it appearing that the title of plaintiffs' ancestor was cancelled and a new one issued in the name of Guadalupe Saralde in 1941, whereas the complaint was only filed in 1954. The court expressed the opinion that the fraud which is the basis of the action is deemed to have been discovered from the time the original title was cancelled and a new one issued in 1941 upon the theory that those titles constitute a public record which serves as a constructive notice to the public. We also find his conclusion erroneous. While legally the registration of real property serves as a constructive notice on which an action based on fraud may be predicated, however, this cannot be invoked in the present case, for there is an averment in the complaint that the issuance of such title has been accomplished by defendant Alejandro Quito through fraud, deceit and misrepresentation and not through a valid and voluntary transfer. It is a rule well settled that the defense of prescription cannot be availed of when the purpose of the action is to compel a trustee to convey the property registered in his name for the benefit of the cestui que trust. 2 And when a person through fraud succeeds in registering the property in his name, the law creates what is called "constructive trust" in favor of the defrauded party and grants to the latter a right to vindicate the property regardless of the lapse of time. Thus, it has been held that "If a person obtains legal title to property by fraud or concealment, courts of equity will impress upon the title a so called constructive trust in favor of the defrauded party" (Gayondato vs. Treasurer of the Philippine Islands, 49 Phil., 244, 249; See also Bancairen, et al. vs. Diones, et al., 98 Phil., 122). It is clear that the defense of prescription cannot be set up in this case. Wherefore, the order appealed from is hereby set aside, with costs against appellees. Paras, C.J., Montemayor, Labrador, Endencia and Felix, JJ., concur. Separate Opinions REYES, J. B. L., J., concurring: I concur with the reasons of the majority decision, but consider the statement to the effect that "property held under constructive trust can be vindicated regardless of the lapse of time" much too broad for unqualified assent. The rule of imprescriptibility is logical in case of express trusts, since a party who agrees to hold property for another, and upon whose promise confidence is reposed, will naturally be held to his agreement, and will not be allowed to set title in himself without first repudiating the trust expressly. The rule can be extended to resulting trusts, since the intent to create a trust exists in such case, even if all requisites of express trusts do not concur. But in constructive trusts, based on fraud or tort, the element of trust and confidence is not present, and the authorities are that no repudiation is required for the application of extinctive prescription (34 Am. Jur. pp. 88, 143; American Law Inst., Restatement on Restitution, sec. 179; Restatement on Trusts, sec. 219).

BAUTISTA ANGELO, J.: This concerns an action instituted in the Court of First Instance of Camarines Sur by plaintiffs against defendants for the recovery of a parcel of land consisting of 18 hectares situated in Pili, Camarines Sur. Defendants, instead of answering the complaint, filed a motion to dismiss on the grounds (1) that plaintiffs have no legal capacity to sue, (2) that the complaint states no cause of action, and (3) that the action had prescribed. Defendants attached to their motion as Annex A Transfer Certificate of Title No. 1065 issued in the name of one Guadalupe Saralde on March 31, 1941 and Original Certificate of Title No. 1018 as Annex B issued in the name of Patricio Marabiles on February 19, 1954. This is a homestead patent granted under Act No. 2874. Plaintiffs filed a written opposition to the motion, to which defendants replied, and thereafter the court issued on November 8, 1954 an order sustaining the motion. Accordingly, it dismissed the complaint with costs against the plaintiffs. When plaintiffs appealed from this order to the Court of Appeals, the case was certified to us on the ground that the questions raised are purely of law. One of the grounds on which the lower court dismissed the complaint is that plaintiffs do not have legal capacity to sue because it appears that the title of the land was issued in the name of Patricio Marabiles who already died and the complaint does not allege that Severina Marabiles and her child who now appears as plaintiffs had been duly declared as his heirs to entitle them to bring the action. The court is of the impression that judicial declaration of heirship is necessary in order that an heir may have legal capacity to bring the action to recover a property belonging to the deceased. This theory is erroneous. The right to assert a cause of action as an heir, although he has not been judicially declared to be so, if duly proven, is well settled in this jurisdiction. This is upon the theory that the property of a deceased person, both real and personal, becomes the property of the heir by the mere fact of death of his predecessor in interest, and as such he can deal with it in precisely the same way in which the deceased could have dealt, subject only to the limitations which by law or by contract may be imposed upon the deceased himself (Suiliong & Co. vs. Marine Insurance Co., Ltd., et al., 12 Phil., 13, 19). Thus, it has been held that "There is no legal precept or established rule which imposes the necessity of a previous legal declaration regarding their status as heirs to an intestate on those who, being of age and with legal capacity, consider themselves the legal heirs of a person, in order that they may maintain an action arising out of a right which belonged to their ancestor" (Hernandez vs. Padua, 14 Phil., 194). A recent case wherein this principle was maintained is Cabuyao vs. Gaagbay, 95 Phil., 614. Another ground on which the dismissal is predicted is that the complaint states no cause of action because while it appears in the complaint that the land was transferred to one Guadalupe Saralde, deceased wife of defendant Alejandro Quito, there is no allegation that said Alejandro Quito and his 7|S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

In this case, however, there is no satisfactory showing when the fraud was actually discovered, hence it can not be said that the period to demand restitution has already lapsed. Padilla and Concepcion, JJ., concur. Payment of the Debts of the Estate Section 1. Debts paid in full if estate sufficient. - If, after hearing all the money claims against the estate, and after ascertaining the amount of such claims, it appears that there are sufficient assets to pay the debts, the executor or administrator pay the same within the time limited for that purpose. Section 2. Part of estate from which debt paid when provision made by will. - If the testator makes provision by his will, or designates the estate to be appropriated for the payment of his debts, the expenses of administration, or the family expenses, they shall be paid according to the provisions of the will; but if the provision made by the will or the estate appropriated, is not sufficient for that purpose, such part of the estate of the testator, real or personal, as is not disposed of by will, if any shall be appropriated for that purpose. Section 3. Personalty first chargeable for debts, then realty. - The personal estate of the deceased not disposed of by will shall be first chargeable with the payment of debts and expenses; and if said personal estate is not sufficient for tat purpose, or its sale would redound to the detriment of the participants for the estate, the whole of the real estate not dispose of by will, or so much thereof as is necessary, may be sold, mortgaged, or otherwise encumbered for that purpose by the executor or administrator, after obtaining the authority of the court therefor. Any deficiency shall be met by contributions in accordance with the provisions of section 6 of this rule. Section 4. Estate to be retained to meet contingent claims. - If the court is satisfied that a contingent claim duly filed 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. Section 5. How contingent claim becoming absolute in two years allowed and paid. Action against distributees later. - If such contingent claim becomes absolute and is presented to the court, or to the executor or administrator, within two (2) 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 and allowed or disallowed by the court as the facts may warrant. If the contingent claim is allowed, the creditor shall receive payment to the same extent as the other creditors if the estate retained by the executor or administrator is sufficient. But if the claim is not so presented, after having become absolute, within said two (2) years, and allowed, the assets retained in the hands of the executor or administrator, not exhausted in the payment of claims, shall be disturbed by the order of the court to the persons entitled to the same; but the assets so distributed may still be applied to the payment of the claim when established, and the creditor may maintain an action against the distributees to recover the debt, and such distributees and their estates shall be liable for the debt in proportion to the estate they have respectively received from the property of the deceased. Section 6. Court to fix contributive shares where devisees, legalitees, or heirs have been possession. Where devisees, legalitees, or heirs have entered into possession of portions of the estate before the debts and expenses have been settled and paid, and have become liable to contribute for the payment of such debts and expenses, the court having jurisdiction of the estate may, by order for that purpose, after hearing, settle the amount of their several liabilities, and order how much and in what manner each person shall contribute, and may issue execution as circumstances require. 8|S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

Section 7. Order of payment if estate insolvent - If the assets which can be appropriated for the payment of debts are not sufficient for that purpose, the executor or administrator shall pay the debts against the estate, observing the provisions of Articles 1059 and 2239 to 2251 of the Civil Code. Section 8. Dividends to be paid in proportion to claims. - If there are no assets sufficient to pay the credits of any once class of creditors after paying the credits entitled to preference over it, each creditor within such class shall be paid a dividend in proportion to his claim. No creditor of any one class shall receive any payment until those of the preceding class are paid. Section 9. Estate of insolvent non-resident, how disposed of. - In case administration is taken in the Philippine of the estate of a person who was at the time of his death an inhabitant of another country, and who died insolvent, hi estate found in the Philippines shall, as far as practicable, be so disposed of that his creditors here and elsewhere may receive each an equal share, in proportion to their respective credits. Section 10. When and how claim proved outside the Philippines against insolvent resident's estate paid. - If it appears to the court having jurisdiction that claims have been duly proven in another country against the estate of an insolvent who was at the time of his death an inhabitant of the Philippines, and that the executor or administrator in the Philippines had knowledge of the presentation of such claims in such country and an opportunity to contest their allowance, the court shall receive a certified list of such claims, when perfected in such country, and add the same to the list of claims proved against the deceased person in the Philippines so that a just distribution of the whole estate may be made equally among all its creditors according to their respective claims; but the benefit of this and the preceding sections shall not be extended to the creditors in another country if the property of such deceased person there found is not equally apportioned to the creditors residing in the Philippines and the other creditor, according to their respective claims. Section 11. Order for payment of debts. - Before the expiration of the time limited for the payment of the debts, the court shall order the payment thereof, and the distribution of the assets received by the executor or administrator for that purpose among the creditors, as the circumstances of the estate require and in accordance with the provisions of this rule. Section 12. Orders relating to payment of debts where appeal is taken. - If an appeal has been taken from a decision of the court concerning a claim, the court may suspend the order for the payment of the debts or may order the distributions among the creditors whose claims are definitely allowed, leaving in the hands of the executor or administrator sufficient assets to pay the claim disputed and appealed. When a disputed claim is finally settled the court having jurisdiction of the estate shall order the same to be paid out of the assets retained to the same extent and in the same proportion with the claims of other creditors. Section 13. When subsequent distribution of assets ordered. - If the whole of the debts are not paid on the first distribution, and if the whole assets are not distributed, or other assets afterwards come to the hands of the executor or administrator, the court may from time to time make further orders for the distributions of assets. Section 14. Creditors to be paid in accordance with terms of order. - When an order is made for the distribution of assets among the creditors, the executor or administration shall, as soon as the time of payment arrives, pay the creditors the amounts of their claims, or the dividend thereon, in accordance with the terms of such order.

Section 15. Time for paying debts and legacies fixed, or extended after notice, within what periods. - On granting letters testamentary or administration the court shall allow to the executor or administrator a time for disposing of the estate and paying the debts and legacies of the deceased, which shall not, in the first instance, exceed one (1) year; but the court may, on application of the executor or administrator and after hearing on such notice of the time and place therefor given to all persons interested as it shall direct, extend the time as the circumstances of the estate require not exceeding six (6) months for a single extension not so that the whole period allowed to the original executor or administrator shall exceed two (2) years. Section 16. Successor of dead executor or administrator may have time extended on notice within certain period. - When an executor or administrator dies, and a new administrator of the same estate is appointed, the court may extend the time allowed for the payment of the debts or legacies beyond the time allowed to the original executor or administrator, not exceeding six (6) months at a time and not exceeding six (6) months beyond the time which the court might have allowed to such original executor or administrator; and notice shall be given of the time and place for hearing such application, as required in the last preceding section.

P AV IA V . DEL A R OS A Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 3083 March 18, 1907

December, 1893, there was substituted as executor Jose de la Rosa, who took possession of the personal property of the state, amounting to 10,673 pesos, Mexican Currency, as well as the property situated at No. 27 Calle Solana, Walled City, likewise the property of the testator; that during the month of April, 1904, the plaintiff, Rafaela Pavia, in her own behalf, and as guardian of Carmen Linart y Pavia, executed a power of attorney in behalf of the aforesaid Jose de la Rosa with the powers therein expressed, and the attorney having accepted such power proceeded to administer the aforesaid estate in a careless manner until the 20th of August, 1903, neglecting the interests of the plaintiffs and wasting the capital, and causing damages amounting to over 15,000 pesos, Philippine currency, owing to the fact of having retired or disposed of without any necessity the sum of 7,207 pesos Mexican currency, together with interest thereon amounting to 360.25 pesos, which amounts would have produced 12,321.90 pesos, Mexican currency, for the plaintiffs; that the executor and attorney De la Rosa neglected to appraise, count, and divide the estate of Linart, deceased, notwithstanding it was his duty to do so, and leased the aforesaid house No. 27 Calle Solana to his relatives from December, 1893, to August, 1903, at a much lower rental than could have been obtained, thereby causing the plaintiffs losses amounting to 6,570 pesos, Mexican Currency; that the aforesaid Jose de la Rosa died on the 14th of September, 1903, leaving the defendants Bibiana and Salud de la Rosa as his only heirs and representatives, Eusebio Canals being the husband of the said Bibiana. The demurrer filed by the defendants was overruled and through their attorney, Ramon Salinas, they answered the former amended complaint praying judgment in their behalf, as against the plaintiffs for the payment of the sum of 1,794.42 5/8 pesos, Mexican currency, as a counterclaim, and for the costs, and denying specifically facts 1, 2, and 9 of the amended complaint; admitting facts 3, 4, 6, 7, 10, and 11 of the same; that they admit the facts stated in paragraph 5 and 8, respectively, in that the said De la Rosa at the death of said Granda substituted him, the said Granda, as executor, and the fact regarding the omission of the making of the partition of the properties pertaining to the estate deceased, and denying all others referring to the properties taken charge of by the said De la Rosa and the rendering of accounts; that in their special defense they allege that they, the defendants, are not responsible for the personal actions of the person from whom they deprived their possession and title, against whom the plaintiffs neglected to bring action during his lifetime, and even then being without any justifiable reason as they now actually pretented; that the deceased De la Rosa upon his taking charge of the properties of the said estate only received from the window of the former execution the draft of payment on the Caja de Depositos(Savings Bank) for the said sum of 7,207 pesos together with interest at the rate of 5 per cent, and not the amount referred to by the plaintiffs, as well as taking over the charge of the said property at No. 27. They further admitted that in 1894, De al Rosa, duly authorized by the plaintiff Rafaela Pavia and with the formalities of law and in order to attend to the maintenance or subsistence of same (the plaintiffs) who were them in Spain, withdrew from the Caja de Depositos (Saving Bank) the said capital, together with interest thereon, which two sums together with the rentals of the aforesaid house have been paid out in full by De la Rosa in the maintenance and support of the plaintiffs and in the care of the building and property and other expenses well known to the same plaintiffs; that, during the time of his administration, De la Rosa rendered accounts on two different occasions, which said accounts showed all transactions had during the entire period of his administration; that Seora Pavia did not object to the first account rendered although she had the same in her possession for three years; that the rents mentioned were adequate with respect to the value of the building erected on land belonging to some other person; that having paid out in expenses all of the money belonging to the estate, of which estate

RAFAELA PAVIA, ET AL., plaintiffs-appellees, vs. BIBIANA DE LA ROSA, ET AL., defendants-appellants. R. Salinas for appellants. Thos. D. Aitken for appellees. TORRES, J.: By an amended complaint filed on the 23rd of November, 1904, in the Court of First Instance of Manila, the plaintiffs prayed that a judgment be rendered in their favor and against the defendants for the sum of 15,000 pesos, Philippine Currency, as damages, together with costs of action, alleging in effect that by reason of the death of the testator, Pablo Linart e Iturralde, Francisco Granda e Iturralde was appointed executor under the will of the said deceased, in which will the minor Carmen Linart y Pavia was made the only universal heir, and that owing to the death of the executor Francisco Granda toward the end of 9|S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

the daughter of the testator is the only heir and the owner of the said house, the partition of same was therefore impracticable, and that the plaintiffs were then indebted to De la Rosa in the amount claimed in the counterclaim and which amount is the balance due to De la Rosa and mentioned in the last account rendered. After hearing the oral testimony presented by both parties, including the documentary evidence attached to the record herein, the court below, on October 13, 1905, rendered judgment in favor of the plaintiffs and against the defendants for 3,488.27 pesos, Mexican currency, equivalent to P3,171.09, Philippine currency, together with interest thereon at rate of 6 per cent per annum from the 27th day of June, 1904, and the costs of the action, from which judgment the defendants filed an exceptions and moved for a new trial, which motion was also denied. The action brought by the plaintiffs, as has been seen, has for its object that of making effective, or of collecting by means of a judgment of the court, the amount of damages alleged to have been caused by De la Rosa, now deceased, to the plaintiffs in the performance of his duties during his lifetime, as attorney for Rafaela Pavia, guardian of the minor Carmen Linart. The defendants, Bibiana and Salud de la Rosa and her husband, in answering the complaints filed by the plaintiffs allege, among other reasons, that they are not responsible for the personal acts of De la Rosa, now deceased, and from whom they derived their right and title; and perhaps owing to this allegation the plaintiffs, with the consent of the court, filed in writing the additional pleading on March 10, 1905, in the Court of First Instance, amending their amended complaint in the following terms: That the aforesaid Jose de la Rosa on September 14, 1903, leaving as his only heirs and representatives the defendants Bibiana and Salud de la Rosa and that said defendants Bibiana and Salud de la Rosa received and accepted from the estate of the said Jose de la Rosa the aforesaid inheritance without benefit of inventory and received and divided among and between themselves, as such heirs, all of the estate, property, and effects left by the aforesaid deceased Jose de la Rosa. It has not been shown, as appears by the record in this cause, that the estate or the intestate succession of the deceased, Jose de la Rosa, was ever opened or that an such inventory ever been presented in evidence in this cause, notwithstanding that at the time of the death of De la Rosa, on the 14th day of September, 1903, the Code of Civil Procedure that is, Act No. 190 was already in force, and that in accordance with its provisions the estate of the deceased should have been administered and liquidated. The provisions of this law of procedure have abrogated, among others, the provisions of article 1003 of the Civil Code and other in relation to the same article with regard to the simple acceptance of the estate of a deceased person, or to that made with benefit of inventory and the consequences thereof. In accordance with the provisions of the aforesaid Act No. 190 it is understood that a estate or intestate succession of a deceased person is always accepted and received with benefit of inventory, and his heirs, even after having taken possession of the estate of the deceased, do not make themselves responsible for the debts of said deceased with their own property, but solely with that property coming from the estate or intestate succession of said deceased. The Code of Civil Procedure now in force makes necessary the opening of a testate or intestate succession immediately after the death of the person whose estate is to be administered, the 10 | S p e c p r o A s s i g n m e n t N o . 1 1 a n d 1 2 _ C h a M e n d o z a

appointment of an executor or administrator, the taking of an inventory of the estate of the deceased, and the appointment of two or more commissioners for the purpose of appraising the property of the estate and deciding as to the claims against said estate (Secs. 641, 642, 656, 660, 668, 669, Code of Civil Procedure.) Section 596 of the aforesaid code provides, nevertheless, for the extrajudicial division of an intestate estate among the heirs of legal age, whether the succession is free from debts or whenever such debts have been paid by the heirs, without proceedings in court, and without prejudice to the right of any creditor therein within the period of two years commencing from the date of the partition of the property belonging to the estate, a right recognized in section 597 of the said code. The powers and duties of the commissioners are established in section 686, and those following, of the Code of Civil Procedure, which sections determine the proceedings which must be followed to admit, hear, and examine all claims filed against the estate of the deceased. With regard to the executor or administrator of the estate of the deceased, section 702 of the Code of Civil Procedure provides: An executor or administrator may commence, prosecute, or defend, in the right of the deceased, actions which survive to such executor or administrator and are necessary for the recovery and protection of the property or rights of the deceased, and may prosecute or defend such actions or suits commenced in the lifetime of the deceased. From the above-quoted, as well as from the following sections and others included in Part II of the aforesaid Code of Civil Procedure, it is deduced that after the death of a person the only entity which may lawfully represent a testate or intestate succession is the executor or administrator appointed by the court charged to care for, maintain, and administer the estate of the deceased in such of lands, or for damages done to such lands, shall be instituted or maintained against him by an heir or devisee, until such time as there is entered s decree of the court assigning such lands to the heir or devisee, or until the time or period allowed for paying the debts of the estate has expired, unless the executor or administrator surrenders the possession of the lands to the heir or devisee. (Sec. 704, Code of Civil Procedure.) And lastly for the partition of the properties belonging to the estate, section 753 of said code provides: After payment of the debts, funeral charges, and expenses of administration, and the allowances, if any, made for the expense of maintenance of the family of the deceased, the court shall assign the residue of the estate to the person entitled to the same, and the court in its decree shall name the persons and proportions or parts to which each is entitled, and such persons may demand and recover their respective shares from the executor or administrator, or from any other person having the same in his possession. From the legal provisions contained in the aforesaid code with regard to estate or intestate succession, it is deduced that the heir lawfully succeeds the deceased from whom he derives his inheritance only after the liquidation of the estate, the payment of the debts of same and the adjudication of the residue of the estate of said deceased, and in the meantime the only person in charge by law to consider all claims

against the estate of the deceased and to attend to or consider the same is the executor or administrator appointed by a competent judge or court. From the above it appears evident that whatever may be the rights of action on the part of Rafaela Pavia and the minor, Carmen Linart, the latter represented by the former as guardian, as to the obligations assumed by Jose de la Rosa, now deceased, it must be prosecuted against the executor or administrator of the estate of said deceased Jose de la Rosa, whose executor or administrator is at this time the only representative of the estate or intestate succession of said deceased; and that in view of this fact and considering the law before us, they should not have brought action against Bibiana and Salud de la Rosa for the mere fact that they were the sisters of said deceased Jose de la Rosa, inasmuch as it is actually shown that the defendant De la Rosa died intestate or left during his lifetime any will, or that the two defendants are the heirs of the deceased by virtue of an executed will or by reason of existing law, or whether or not the deceased has left properties, or who is the executor or administrator of the said properties, or whether the properties belonging to the estate of the deceased brother of the defendants were ever adjudicated or partitioned by virtue of an order of court in favor of the defendants. Wherefore, taking into consideration the reasons and facts hereinbefore given, we reverse the judgment appealed from, and find for the defendants Bibiana and Salud de la Rosa, and Eusebio Canals, without special finding as to the costs herein, reserving to the plaintiffs to right to institute proper action against the executor or administrator of the properties of the estate of the deceased, Jose de la Rosa, in accordance with the provisions of the Code of Civil Procedure now in force covering the subject-matter herein. After the expiration of twenty days from the date of 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. Arellano, C.J., Mapa, Johnson, Willard, and Tracey, JJ., concur.

Pastor, Jr. (PASTOR, JR.) and Sofia Pastor de Midgely (SOFIA), and an illegitimate child, not natural, by the name of Lewellyn Barlito Quemada (QUEMADA). PASTOR, JR. is a Philippine citizen, having been naturalized in 1936. SOFIA is a Spanish subject. QUEMADA is a Filipino by his mother's citizenship. On November 13, 1970, QUEMADA filed a petition for the probate and allowance of an alleged holographic will of PASTOR, SR. with the Court of First Instance of Cebu, Branch I (PROBATE COURT), docketed as SP No. 3128-R. The will contained only one testamentary disposition: a legacy in favor of QUEMADA consisting of 30% of PASTOR, SR.'s 42% share in the operation by Atlas Consolidated Mining and Development Corporation (ATLAS) of some mining claims in Pia-Barot, Cebu. On November 21, 1970, the PROBATE COURT, upon motion of QUEMADA and after an ex parte hearing, appointed him special administrator of the entire estate of PASTOR, SR., whether or not covered or affected by the holographic will. He assumed office as such on December 4, 1970 after filing a bond of P5,000.00. On December 7, 1970, QUEMADA as special administrator, instituted against PASTOR, JR. and his wife an action for reconveyance of alleged properties of the estate, which included the properties subject of the legacy and which were in the names of the spouses PASTOR, JR. and his wife, Maria Elena Achaval de Pastor, who claimed to be the owners thereof in their own rights, and not by inheritance. The action, docketed as Civil Case No. 274-R, was filed with the Court of First Instance of Cebu, Branch IX. On February 2, 1971, PASTOR, JR. and his sister SOFIA filed their opposition to the petition for probate and the order appointing QUEMADA as special administrator. On December 5, 1972, the PROBATE COURT issued an order allowing the will to probate. Appealed to the Court of Appeals in CA-G.R. No. 52961-R, the order was affirmed in a decision dated May 9, 1977. On petition for review, the Supreme Court in G.R. No. L-46645 dismissed the petition in a minute resolution dated November 1, 1977 and remanded the same to the PROBATE COURT after denying reconsideration on January 11, 1978. For two years after remand of the case to the PROBATE COURT, QUEMADA filed pleading after pleading asking for payment of his legacy and seizure of the properties subject of said legacy. PASTOR, JR. and SOFIA opposed these pleadings on the ground of pendency of the reconveyance suit with another branch of the Cebu Court of First Instance. All pleadings remained unacted upon by the PROBATE COURT. On March 5, 1980, the PROBATE COURT set the hearing on the intrinsic validity of the will for March 25, 1980, but upon objection of PASTOR, JR. and SOFIA on the same ground of pendency of the reconveyance suit, no hearing was held on March 25. Instead, the PROBATE COURT required the parties to submit their respective position papers as to how much inheritance QUEMADA was entitled to receive under the will. Pursuant thereto, PASTOR, JR. and SOFIA submitted their Memorandum of authorities dated April 10, which in effect showed that determination of how much QUEMADA should receive was still premature. QUEMADA submitted his Position paper dated April 20, 1980. ATLAS, upon order of the Court, submitted a sworn statement of royalties paid to the Pastor Group of claimants from June 1966 (when Pastor, Sr. died) to February 1980. The statement revealed that of the mining claims being operated by ATLAS, 60% pertained to the Pastor Group distributed as follows: 1. A. Pastor, Jr. 40.5% 2. E. Pelaez, Sr. 15.0% 3. B. Quemada 4.5%

P AS TOR V . CA SPOUSES ALVARO PASTOR, JR. and MA. ELENA ACHAVAL DE PASTOR, petitioners, vs. THE COURT OF APPEALS, JUAN Y. REYES, JUDGE OF BRANCH I, COURT OF APPEALS, JUAN Y. REYES, JUDGE OF BRANCH I, COURT OF FIRST INSTANCE OF CEBU and LEWELLYN BARLITO QUEMADA, respondents.1983 June 241st DivisionG.R. No. L-56340 G.R. No. L-56340D E C I S I O N

PLANA, J.: I. FACTS: This is a case of hereditary succession. Alvaro Pastor, Sr. (PASTOR, SR.), a Spanish subject, died in Cebu City on June 5, 1966, survived by his Spanish wife Sofia Bossio (who also died on October 21, 1966), their two legitimate children Alvaro 11 | S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

On August 20, 1980, while the reconveyance suit was still being litigated in Branch IX of the Court of First Instance of Cebu, the PROBATE COURT issued the now assailed Order of Execution and Garnishment, resolving the question of ownership of the royalties payable by ATLAS and ruling in effect that the legacy to QUEMADA was not inofficious. [There was absolutely no statement or claim in the Order that the Probate Order of December 5, 1972 had previously resolved the issue of ownership of the mining rights of royalties thereon, nor the intrinsic validity of the holographic will.] The order of August 20, 1980 found that as per the holographic will and a written acknowledgment of PASTOR, JR. dated June 17, 1962, of the above 60% interest in the mining claims belonging to the Pastor Group, 42% belonged to PASTOR, SR. and only 33% belonged to PASTOR, JR. The remaining 25% belonged to E. Pelaez, also of the Pastor Group. The PROBATE COURT thus directed ATLAS to remit directly to QUEMADA the 42% royalties due decedent's estate, of which QUEMADA was authorized to retain 75% for himself as legatee and to deposit 25% with a reputable banking institution for payment of the estate taxes and other obligations of the estate. The 33% share of PASTOR, JR. and/or his assignees was ordered garnished to answer for the accumulated legacy of QUEMADA from the time of PASTOR, SR.'s death, which amounted to over two million pesos. The order being "immediately executory", QUEMADA succeeded in obtaining a Writ of Execution and Garnishment on September 4, 1980, and in serving the same on ATLAS on the same day. Notified of the Order on September 6, 1980, the oppositors sought reconsideration thereof on the same date primarily on the ground that the PROBATE COURT gravely abused its discretion when it resolved the question of ownership of the royalties and ordered the payment of QUEMADA's legacy after prematurely passing upon the intrinsic validity of the will. In the meantime, the PROBATE COURT ordered suspension of payment of all royalties due PASTOR, JR. and/or his assignees until after resolution of oppositors' motion for reconsideration. Before the Motion for Reconsideration could be resolved, however, PASTOR, JR., this time joined by his wife Ma. ELENA ACHAVAL DE PASTOR, filed with the Court of Appeals a Petition for Certiorari and Prohibition with a prayer for writ of preliminary injunction (CA-G.R. No. SP-11373-R). They assailed the Order dated August 20, 1980 and the writ of execution and garnishment issued pursuant thereto. The petition was denied on November 18, 1980 on the grounds (1) that its filing was premature because the Motion for Reconsideration of the questioned Order was still pending determination by the PROBATE COURT; and (2) that although "the rule that a motion for reconsideration is prerequisite for an action for certiorari is never an absolute rule," the Order assailed is "legally valid." On December 9, 1980, PASTOR, JR. and his wife moved for reconsideration of the Court of Appeal's decision of November 18, 1980, calling the attention of the appellate court to another order of the Probate Court dated November 11, 1980 (i.e., while their petition for certiorari was pending decision in the appellate court), by which the oppositors' motion for reconsideration of the Probate Court's Order of August 20, 1980 was denied. [The November 11 Order declared that the questions of intrinsic validity of the will and of ownership over the mining claims (not the royalties alone) had been finally adjudicated by the final and executory Order of December 5, 1972, as affirmed by the Court of Appeals and the Supreme Court, thereby rendering moot and academic the suit for reconveyance then pending in the Court of First Instance of Cebu, Branch IX. It clarified that only the 33% share of PASTOR, JR. in the royalties (less than 7.5% share which he had assigned to QUEMADA before PASTOR, SR. died) was to be garnished and that as regards PASTOR, SR.'s 42% share, what was ordered was just the transfer of its possession to the custody of the PROBATE COURT through the special administrator. Further, the Order granted QUEMADA 6% interest on his unpaid legacy from August 1980 until fully paid.] Nonetheless, the Court of Appeals denied reconsideration. Hence, this Petition for Review by certiorari with prayer for a writ of preliminary injunction, assailing the decision of the Court of Appeals dated November 18, 1980 as well as the orders of the Probate Court 12 | S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

dated August 20, 1980, November 11, 1980 and December 17, 1980, filed by petitioners on March 26, 1981, followed by a Supplemental Petition with Urgent Prayer for Restraining Order. In April 1981, the Court (First Division) issued a writ of preliminary injunction, the lifting of which was denied in the Resolution of the same Division dated October 18, 1982, although the bond of petitioners was increased from P50.000.00 to P100,000.00. Between December 21, 1981 and October 12, 1982, private respondent filed seven successive motions for early resolution. Five of these motions expressly prayed for the resolution of the question as to whether or not the petition should be given due course. On October 18, 1982, the Court (First Division) adopted a resolution stating that "the petition in fact and in effect was given due course when this case was heard on the merits on September 7, (should be October 21, 1981) and concise memoranda in amplification of their oral arguments on the merits of the case were filed by the parties pursuant to the resolution of October 21, 1981 . . ." and denied in a resolution dated December 13, 1982, private respondent's "Omnibus motion to set aside resolution dated October 18, 1982 and to submit the matter of due course to the present membership of the Division; and to reassign the case to another ponente." Upon Motion for Reconsideration of the October 18, 1982 and December 13, 1982 Resolutions, the Court en banc resolved to CONFIRM the questioned resolutions insofar as they resolved that the petition in fact and in effect had been given due course. II. ISSUES: Assailed by the petitioners in these proceedings is the validity of the Order of execution and garnishment dated August 20, 1980 as well as the Orders subsequently issued allegedly to implement the Probate Order of December 5, 1972, to wit: the Order of November 11, 1980 declaring that the Probate Order of 1972 indeed resolved the issues of ownership and intrinsic validity of the will, and reiterating the Order of Execution dated August 20, 1980; and the Order of December 17, 1980 reducing to P2,251,516.74 the amount payable to QUEMADA representing the royalties he should have received from the death of PASTOR, SR. in 1966 up to February 1980. The Probate Order itself, insofar as it merely allowed the holographic will in probate, is not questioned. But petitioners denounce the Probate Court for having acted beyond its jurisdiction or with grave abuse of discretion when it issued the assailed Orders. Their argument runs this way: Before the provisions of the holographic will can be implemented, the questions of ownership of the mining properties and the intrinsic validity of the holographic will must first be resolved with finality. Now, contrary to the position taken by the Probate Court in 1980 - i.e., almost eight years after the probate of the will in 1972 - the Probate Order did not resolve the two said issues. Therefore, the Probate Order could not have resolved and actually did not decide QUEMADA's entitlement to the legacy. This being so, the Orders for the payment of the legacy in alleged implementation of the Probate Order of 1972 are unwarranted for lack of basis. Closely related to the foregoing is the issue raised by QUEMADA: The Probate Order of 1972 having become final and executory, how can its implementation (payment of legacy) be restrained? Of course, the question assumes that QUEMADA's entitlement to the legacy was finally adjudged in the Probate Order. On the merits, therefore, the basic issue is whether the Probate Order of December 5, 1972 resolved with finality the questions of ownership and intrinsic validity. A negative finding will necessarily render moot and academic the other issues raised by the parties, such as the jurisdiction of the Probate Court to

conclusively resolve title to property, and the constitutionality and repercussions of a ruling that the mining properties in dispute, although in the name of PASTOR, JR. and his wife, really belonged to the decedent despite the latter's constitutional disqualification as an alien. On the procedural aspect, placed in issue is the propriety of certiorari as a means to assail the validity of the order of execution and the implementing writ. III. DISCUSSION: 1. Issue of Ownership (a) In a special proceeding for the probate of a will, the issue by and large is restricted to the extrinsic validity of the will, i.e., whether the testator, being of sound mind, freely executed the will in accordance with the formalities prescribed by law. (Rules of Court, Rule 75, Section 1; Rule 76, Section 9.) As a rule, the question of ownership is an extraneous matter which the Probate Court cannot resolve with finality. Thus, for the purpose of determining whether a certain property should or should not be included in the inventory of estate properties, the Probate Court may pass upon the title thereto, but such determination is provisional, not conclusive, and is subject to the final decision in a separate action to resolve title. [3 Moran, Comments on the Rules of Court (1980 ed.), p. 458; Valero Vda. de Rodriguez vs. Court of Appeals, 91 SCRA 540.] (b) The rule is that execution of a judgment must conform to that decreed in the dispositive part of the decision. (Philippine-American Insurance Co. vs. Honorable Flores, 97 SCRA 811.) However, in case of ambiguity or uncertainty, the body of the decision may be scanned for guidance in construing the judgment. (Heirs of Presto vs. Galang, 78 SCRA 534; Fabular vs. Court of Appeals, 119 SCRA 329; Robles vs. Timario, 107 Phil. 809.) The Order sought to be executed by the assailed Order of execution is the Probate Order of December 5, 1972 which allegedly resolved the question of ownership of the disputed mining properties. The said Probate Order enumerated the issues before the Probate Court, thus: "Unmistakably, there are three aspects in these proceedings: (1) the probate of the holographic will; (2) the intestate estate aspect; and (3) the administration proceedings for the purported estate of the decedent in the Philippines. "In its broad and total perspective the whole proceedings are being impugned by the oppositors on jurisdictional grounds, i.e., that the fact of the decedent's residence and existence of properties in the Philippines have not been established. "Specifically placed in issue with respect to the probate proceedings are: (a) whether or not the holographic will (Exhibit "J") has lost its efficacy as the last will and testament upon the death of Alvaro Pastor, Sr. on June 5, 1966, in Cebu City, Philippines; (b) Whether or not the said will has been executed with all the formalities required by law; and (c) Did the late presentation of the holographic will affect the validity of the same? "Issues In the Administration Proceedings are as follows: (1) Was the ex-parte appointment of the petitioner as special administrator valid and proper? (2) Is there any indispensable necessity for the estate of the decedent to be placed under administration? (3) Whether or not petition is qualified to be a special administrator of the estate; and (4) Whether or not the properties listed in the inventory (submitted by the special administrator but not approved by the Probate Court) are to be excluded." Then came what purports to be the dispositive portion: 13 | S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

"Upon the foregoing premises, this Court rules on and resolves some of the problems and issues presented in these proceedings, as follows: "(a) The Court has acquired jurisdiction over the probate proceedings As it hereby allows and approves the so-called holographic will of testator Alvaro Pastor, Sr., executed on July 31, 1961 with respect to its extrinsic validity, the same having been duly authenticated pursuant to the requisites or solemnities prescribed by law. Let, therefore, a certificate of its allowance be prepared by the Branch Clerk of this Court to be signed by this Presiding Judge, and attested by the seal of the Court, and thereafter attached to the will, and the will and certificate filed and recorded by the clerk. Let attested copies of the will and of the certificate of allowance thereof be sent to Atlas Consolidated Mining & Development Corporation, Goodrich Bldg., Cebu City, and the Register of Deeds of Cebu or of Toledo City, as the case may be, for recording. "(b) There was a delay in the granting of the letters testamentary or of administration - for as a matter of fact, no regular executor and/or administrator has been appointed up to this time - and the appointment of a special administrator was, and still is, justified under the circumstances to take possession and charge of the estate of the deceased in the Philippines (particularly in Cebu) until the problems causing the delay are decided and the regular executor and/or administrator appointed. "(c) There is a necessity and propriety of a special administrator and later on an executor and/or administrator in these proceedings, in spite of this Court's declaration that the oppositors are the forced heirs and the petitioner is merely vested with the character of a voluntary heir to the extent of the bounty given to him (under) the will insofar as the same will not prejudice the legitimes of the oppositors, for the following reasons: 1. To submit a complete inventory of the estate of the decedent-testator Alvaro Pastor, Sr.; 2. To administer and to continue to put to prolific utilization of the properties of the decedent; 3. To keep and maintain the houses and other structures and fences belonging to the estate, since the forced heirs are residing in Spain, and prepare them for delivery to the heirs in good order after partition and when directed by the Court, but only after the payment of estate and inheritance taxes; "(d) Subject to the outcome of the suit for reconveyance of ownership and possession of real and personal properties in Civil Case No. 274-T before Branch IX of the Court of First Instance of Cebu, the intestate estate administration aspect must proceed, unless, however, it is duly proven by the oppositors that debts of the decedent have already been paid, that there had been an extrajudicial partition or summary one between the forced heirs, that the legacy to be given and delivered to the petitioner does not exceed the free portion of the estate of the testator, that the respective shares of the forced heirs have been fairly apportioned, distributed and delivered to the two forced heirs of Alvaro Pastor, Sr., after deducting the property willed to the petitioner, and the estate and inheritance taxes have already been paid to the Government thru the Bureau of Internal Revenue. "The suitability and propriety of allowing petitioner to remain as special administrator or administrator of the other properties of the estate of the decedent, which properties are not directly or indirectly affected by the provisions of the holographic will (such as bank deposits, land in Mactan, etc.), will be resolved in another order as separate incident, considering that this order should have been properly issued solely as a resolution on the issue of whether or not to allow and approve the aforestated will." Nowhere in the dispositive portion is there a declaration of ownership of specific properties. On the contrary, it is manifest therein that ownership was not resolved. For it confined itself to the question of extrinsic validity of the will, and the need for and propriety of appointing a special administrator. Thus it allowed and approved the holographic will "with respect to its extrinsic validity, the same having been

duly authenticated pursuant to the requisites or solemnities prescribed by law." It declared that the intestate estate administration aspect must proceed "subject to the outcome of the suit for reconveyance of ownership and possession of reel and personal properties in Civil Case 274-T before Branch IX of the CFI of Cebu." [Parenthetically, although the statement refers only to the "intestate" aspect, it defies understanding how ownership by the estate of some properties could be deemed finally resolved for purposes of testate administration, but not so for intestate purposes. Can the estate be the owner of a property for testate but not for intestate purposes?] Then again, the Probate Order (while indeed it does not direct the implementation of the legacy) conditionally stated that the intestate administration aspect must proceed "unless . . . it is proven . . . that the legacy to be given and delivered to the petitioner does not exceed the free portion of the estate of the testator," which clearly implies that the issue of impairment of legitime (an aspect of intrinsic validity) was in fact not resolved. Finally, the Probate Order did not rule on the propriety of allowing QUEMADA to remain as special administrator of estate properties not covered by the holographic will, "considering that this (Probate) Order should have been properly issued solely as a resolution on the issue of whether or not to allow and approve the aforestated will." (c) That the Probate Order did not resolve the question of ownership of the properties listed in the estate inventory was appropriate, considering that the issue of ownership was the very subject of controversy in the reconveyance suit that was still pending in Branch IX of the Court of First Instance of Cebu. (d) What, therefore, the Court of Appeals and, in effect, the Supreme Court affirmed en toto when they reviewed the Probate Order were only the matters properly adjudged in the said Order. (e) In an attempt to justify the issuance of the order of execution dated August 20, 1980, the Probate Court in its Order of November 11, 1980 explained that the basis for its conclusion that the question of ownership had been formally resolved by the Probate Order of 1972 are the findings in the latter Order that (1) during the lifetime of the decedent, he was receiving royalties from ATLAS; (2) he had resided in the Philippines since pre-war days and was engaged in the mine prospecting business since 1937 particularly in the City of Toledo; and (3) PASTOR, JR. was only acting as dummy for his father because the latter was a Spaniard. Based on the premises laid, the conclusion is obviously farfetched. (f) It was, therefore, error for the assailed implementing Orders to conclude that the Probate Order adjudged with finality the question of ownership of the mining properties and royalties, and that, premised on this conclusion, the dispositive portion of the said Probate Order directed the special administrator to pay the legacy in dispute. 2. Issue of Intrinsic Validity of the Holographic Will (a) When PASTOR, SR. died in 1966, he was survived by his wife, aside from his two legitimate children and one illegitimate son. There is therefore a need to liquidate the conjugal partnership and set apart the share of PASTOR, SR.'s wife in the conjugal partnership preparatory to the administration and liquidation of the estate of PASTOR, SR. which will include, among others, the determination of the extent of the statutory usufructuary right of his wife until her death. ** When the disputed Probate order was issued on December 5, 1972, there had been no liquidation of the community properties of PASTOR, SR. and his wife. (b) So, also, as of the same date, there has been no prior definitive determination of the assets of the estate of PASTOR, SR. There was an inventory of his properties presumably prepared by the special administrator, but it does not appear that it was ever the subject of a hearing or that it was judiciary 14 | S p e c p r o A s s i g n m e n t N o . 1 1 and 1 2 _C ha Mendoza

approved. The reconveyance or recovery of properties allegedly owned but not in the name of PASTOR, SR. was still being litigated in another court. (c) There was no appropriate determination, much less payment, of the debts of the decedent and his estate. Indeed, it was only in the Probate Order of December 5, 1972 where the Probate Court ordered that ". . . a notice be issued and published pursuant to the provisions of Rule 86 of the Rules of Court, requiring all persons having money claims against the decedent to file them in the office of the Branch Clerk of this Court." (d) Nor had the estate tax been determined and paid, or at least provided for, as of December 5, 1972. (e) The net assets of the estate not having been determined, the legitime of the forced heirs in concrete figures could not be ascertained. (f) All the foregoing deficiencies considered, it was not possible to determine whether the legacy of QUEMADA - a fixed share in a specific property rather than an aliquot part of the entire net estate of the deceased - would produce an impairment of the legitime of the compulsory heirs. (g) Finally, there actually was no determination of the intrinsic validity of the will in other respects. It was obviously for this reason that as late as March 5, 1980 - more than 7 years after the Probate Order was issued - the Probate Court scheduled on March 25, 1980 a hearing on the intrinsic validity of the will. 3. Propriety of Certiorari Private respondent challenges the propriety of certiorari as a means to assail the validity of the disputed Order of execution. He contends that the error, if any, is one of judgment, not jurisdiction, and properly correctible only by appeal, not certiorari. Under the circumstances of the case at bar, the challenge must be rejected. Grave abuse of discretion amounting to lack of jurisdiction is much too evident in the actuations of the probate court to be overlooked or condoned. (a) Without a final, authoritative adjudication of the issue as to what properties compose the estate of PASTOR, SR. in the face of conflicting claims made by heirs and a non-heir (MA. ELENA ACHAVAL DE PASTOR) involving properties not in the name of the decedent, and in the absence of a resolution on the intrinsic validity of the will here in question, there was no basis for the Probate Court to hold in its Probate Order of 1972, which it did not, that private respondent is entitled to the payment of the questioned legacy. Therefore, the Order of Execution of August 20, 1980 and the subsequent implementing orders for the payment of QUEMADA's legacy, in alleged implementation of the dispositive part of the Probate Order of December 5, 1972, must fall for lack of basis. (b) The ordered payment of legacy would be violative of the rule requiring prior liquidation of the estate of the deceased, i.e., the determination of the assets of the estate and payment of all debts and expenses, before apportionment and distribution of the residue among the heirs and legatees. (Bernardo vs. Court of Appeals, 7 SCRA 367.) (c) Neither has the estate tax been paid on the estate of PASTOR, SR. Payment therefore of the legacy to QUEMADA would collide with the provision of the National Internal Revenue Code requiring payment of estate tax before delivery to any beneficiary of his distributive share of the estate (Section 107 [c]).

(d) The assailed order of execution was unauthorized, having been issued purportedly under Rule 88, Section 6 of the Rules of Court which reads: "Sec. 6. Court to fix contributive shares where devisees, legatees, or heirs have been in possession. Where devisees, legatees, or heirs have entered into possession of portions of the estate before the debts and expenses have been settled and paid and have become liable to contribute for the payment of such debts and expenses, the court having jurisdiction of the estate may, by order for that purpose, after hearing, settle the amount of their several liabilities, and order how much and in what manner each person shall contribute, and may issue execution as circumstances require." The above provision clearly authorizes execution to enforce payment of debts of estate. A legacy is not a debt of the estate; indeed, legatees are among those against whom execution is authorized to be issued. ". . . there is merit in the petitioners' contention that the probate court generally cannot issue a writ of execution. It is not supposed to issue a writ of execution because its orders usually refer to the adjudication of claims against the estate which the executor or administrator may satisfy without the necessity of resorting to a writ of execution. The probate court, as such, does not render any judgment enforceable by execution. "The circumstances that the Rules of Court expressly specifies that the probate court may issue execution (a) to satisfy (debts of the estate out of) the contributive shares of devisees, legatees and heirs in possession of the decedent's assets (Sec. 6, Rule 88), (b) to enforce payment of the expenses of partition (Sec. 3, Rule 90), and (c) to satisfy the costs when a person is cited for examination in probate proceedings (Sec. 13, Rule 142) may mean, under the rule of inclusion unius est exclusion alterius, that those are the only instances when it can issue a writ of execution. (Vda. de Valera vs. Ofilada, 59 SCRA 96, 108.) (d) It is within a court's competence to order the execution of a final judgment; but to order the execution of a final order (which is not even meant to be executed) by reading into it terms that are not there and in utter disregard of existing rules and law, is manifest grave abuse of discretion tantamount to lack of jurisdiction. Consequently, the rule that certiorari may not be invoked to defeat the right of a prevailing party to the execution of a valid and final judgment, is inapplicable. For when an order of execution is issued with grave abuse of discretion or is at variance with the judgment sought to be enforced (PVTA vs. Honorable Gonzales, 92 SCRA 172), certiorari will lie to abate the order of execution. (e) Aside from the propriety of resorting to certiorari to assail an order of execution which varies the terms of the judgment sought to be executed or does not find support in the dispositive part of the latter, there are circumstances in the instant case which justify the remedy applied for. Petitioner MA. ELENA ACHAVAL DE PASTOR, wife of PASTOR, JR., is the holder in her own right of three mining claims which are one of the objects of conflicting claims of ownership. She is not an heir of PASTOR, SR. and was not a party to the probate proceedings. Therefore, she could not appeal from the Order of execution issued by the Probate Court. On the other hand, after the issuance of the execution order, the urgency of the relief she and her co-petitioner husband seek in the petition for certiorari militates against requiring her to go through the cumbersome procedure of asking for leave to intervene in the probate proceedings to enable her, if leave is granted, to appeal from the challenged order of execution which has ordered the immediate transfer and/or garnishment of the royalties derived from mineral properties of which she is the duly registered owner and/or grantee together with her husband. She could not have intervened before the issuance of the assailed orders because she had no valid ground to intervene. The matter of ownership over the properties subject of the execution was then still being litigated in another court in a reconveyance suit filed by the special administrator of the estate of PASTOR, SR.

Likewise, at the time petitioner PASTOR, JR. filed the petition for certiorari with the Court of Appeals, appeal was not available to him since his motion for reconsideration of the execution order was still pending resolution by the Probate Court. But in the face of actual garnishment of their major source of income, petitioners could no longer wait for the resolution of their motion for reconsideration. They needed prompt relief from the injurious effects of the execution order. Under the circumstances, recourse to certiorari was the feasible remedy. WHEREFORE, the decision of the Court of Appeals in CA-G.R. No. SP-11373-R is reversed. The Order of execution issued by the probate Court dated August 20, 1980, as well as all the Orders issued subsequent thereto in alleged implementation of the Probate Order dated December 5, 1972, particularly the Orders dated November 11, 1980 and December 17, 1980, are hereby set aside; and this case is remanded to the appropriate Regional Trial Court for proper proceedings, subject to the judgment to be rendered in Civil Case No. 274-R. SO ORDERED. Teehankee (Chairman), Melencio-Herrera, Vasquez and Relova JJ., concur. Gutierrez, J., took no part.

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