MOISES SAN DIEGO, SR., petitioner, vs. ADELO NOMBRE and PEDRO ESCANLAR, respondents. G.R. No.

L-19265 May 29, 1964 The case at bar had its origin in Special Proceedings No. 7279 of the CFI of Negros Occidental wherein respondent Adelo Nombre was the duly constituted judicial administrator. On May 1, 1960, Nombre, in his capacity was judicial administrator of the intestate estate subject of the Sp. Proc. stated above, leased one of the properties of the estate (a fishpond identified as Lot No. 1617 of the cadastral survey of Kabankaban, Negros Occidental), to Pedro Escanlar, the other respondent. The terms of the lease was for three (3) years, with a yearly rental of P3,000.00 to expire on May 1, 1963, the transaction having been done, admittedly, without previous authority or approval of the Court where the proceedings was pending. On January 17, 1961, Nombre was removed as administrator by Order of the court and one Sofronio Campillanos was appointed in his stead. The appeal on the Order of Nombre's removal is supposedly pending with the Court of Appeals. Respondent Escanlar was cited for contempt, allegedly for his refusal to surrender the fishpond to the newly appointed administrator. On March 20, 1961, Campillanos filed a motion asking for authority to execute a lease contract of the same fishpond, in favor of petitioner herein, Moises San Diego, Sr., for 5 years from 1961, at a yearly rental of P5,000.00. Escanlar was not notified of such motion. Nombre, the deposed administrator, presented a written opposition to the motion of Campillanos on April 11, 1964, pointing out that the fishpond had been leased by him to Escanlar for 3 years, the period of which was going to expire on May 1, 1963. In a supplemental opposition, he also invited the attention of the Court that to grant the motion of the new administrator would in effect nullify the contract in favor of Escanlar, a person on whom the Court had no jurisdiction. He also intimated that the validity of the lease contract entered into by a judicial administrator, must be recognized unless so declared void in a separate action. The opposition notwithstanding, the Court on April 8, 1961, in effect declared that the contract in favor of Escanlar was null and void, for want of judicial authority and that unless he would offer the same as or better conditions than the prospective lessee, San Diego, there was no good reason why the motion for authority to lease the property to San Diego should not be granted. Nombre moved to reconsider the Order of April 8, stating that Escanlar was willing to increase the rental of P5,000.00, but only after the termination of his original contract. The motion for reconsideration was denied on April 24, 1961, the trial judge stating that the contract in favor of Escanlar was executed in bad faith and was fraudulent because of the imminence of Nombre's removal as administrator, one of the causes of which was his indiscriminate pleasant, of the property with inadequate rentals. From this Order, a petition for Certiorari asking for the annulment of the Orders of April 8 and 24, 1961 was presented by Nombre and Escanlar with the Court of Appeals. A Writ of preliminary injunction was likewise prayed for to restrain the new administrator Campillanos from possessing the fishpond and from executing a new lease contract covering it; requiring him to return the possession thereof to Escanlar, plus damages and attorney's fees in the amount of P10,000.00 and costs. The Court of Appeals issued the injunctive writ and required respondents therein to Answer. Campillanos insisted on the invalidity of the contract in favor of Escanlar; the lower court alleged that it did not exactly annul or invalidate the lease in his questioned orders but suggested merely that Escanlar "may file a separate ordinary action in the Court of general jurisdiction." The Court of Appeals, in dismissing the petition for certiorari, among others said
The controlling issue in this case is the legality of the contract of lease entered into by the former administrator Nombre, and Pedro Escanlar on May 1, 1960.

Respondents contend that this contract, not having been authorized or approved by the Court, is null and void and cannot be an obstacle to the execution of another of lease by the new administrator, Campillanos. This contention is without merit. ... . It has been held that even in the absence of such special powers, a contract or lease for more than 6 years is not entirely invalid; it is invalid only in so far as it exceeds the six-year limit (Enrique v. Watson Company, et al., 6 Phil. 84). 1 No such limitation on the power of a judicial administrator to grant a lease of property placed under his custody is provided for in the present law. Under Article 1647 of the present Civil Code, it is only when the lease is to be recorded in the Registry of Property that it cannot be instituted without special authority. Thus, regardless of the period of lease, there is no need of special authority unless the contract is to be recorded in the Registry of Property. As to whether the contract in favor of Escanlar is to be so recorded is not material to our inquiry.
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On the contrary, Rule 85, Section 3, of the Rules of Court authorizes a judicial administrator, among other things, to administer the estate of the deceased not disposed of by will. Commenting on this Section in the light of several Supreme Court decisions (Jocson de Hilado v. Nava, 69 Phil. 1; Gamboa v. Gamboa, 68 Phil. 304; Ferraris v. Rodas, 65 Phil. 732; Rodriguez v. Borromeo, 43 Phil. 479), Moran says: "Under this provision, the executor or administrator has the power of administering the estate of the deceased for purposes of liquidation and distribution. He may, therefore, exercise all acts of administration without special authority of the Court. For instance, he may lease the property without securing previously any permission from the court. And where the lease has formally been entered into, the court cannot, in the same proceeding, annul the same, to the prejudice of the lessee, over whose person it had no jurisdiction. The proper remedy would be a separate action by the administrator or the heirs to annul the lease. ... . On September 13, 1961, petitioner herein Moises San Diego, Sr., who was not a party in the case, intervened and moved for a reconsideration of the above judgment. The original parties (the new administrator and respondent judge) also filed Motions for reconsideration, but we do not find them in the record. On November 18, 1961, the Court of Appeals denied the motions for reconsideration. With the denial of the said motions, only San Diego, appealed therefrom, raising legal questions, which center on "Whether a judicial administrator can validly lease property of the estate without prior judicial authority and approval", and "whether the provisions of the New Civil Code on Agency should apply to judicial administrators." The Rules of Court provide that An executor or administrator shall have the right to the possession of the real as well as the personal estate of the deceased so long as it is necessary for the payment of the debts and the expenses of administration, and shall administer the estate of the deceased not disposed of by his will. (Sec. 3, Rule 85, old Rules). Lease has been considered an act of administration (Jocson v. Nava; Gamboa v. Gamboa; Rodriguez v. Borromeo; Ferraris v. Rodas, supra). The Civil Code, on lease, provides: If a lease is to be recorded in the Registry of Property, the following persons cannot constitute the same without proper authority, the husband with respect to the wife's paraphernal real estate, the father or guardian as to the property of the minor or ward, and the manager without special power. (Art. 1647).

The same Code, on Agency, states: Special powers of attorneys are necessary in the following cases: (8) To lease any real property to another person for more than one year. (Art. 1878) Petitioner contends, that No. 8, Art. 1878 is the limitation to the right of a judicial administrator to lease real property without prior court authority and approval, if it exceeds one year. The lease contract in favor of Escanlar being for 3 years and without such court approval and authority is, therefore, null and void. Upon the other hand, respondents maintain that there is no limitation of such right; and that Article 1878 does not apply in the instant case. We believe that the Court of Appeals was correct in sustaining the validity of the contract of lease in favor of Escanlar, notwithstanding the lack of prior authority and approval. The law and prevailing jurisprudence on the matter militates in favor of this view. While it may be admitted that the duties of a judicial administrator and an agent (petitioner alleges that both act in representative capacity), are in some respects, identical, the provisions on agency (Art. 1878, C.C.), should not apply to a judicial administrator. A judicial administrator is appointed by the Court. He is not only the representative of said Court, but also the heirs and creditors of the estate (Chua Tan v. Del Rosario, 57 Phil. 411). A judicial administrator before entering into his duties, is required to file a bond. These circumstances are not true in case of agency. The agent is only answerable to his principal. The protection which the law gives the principal, in limiting the powers and rights of an agent, stems from the fact that control by the principal can only be thru agreements, whereas the acts of a judicial administrator are subject to specific provisions of law and orders of the appointing court. The observation of former Chief Justice Moran, as quoted in the decision of the Court of Appeals, is indeed sound, and We are not prone to alter the same, at the moment. We, likewise, seriously doubt petitioner's legal standing to pursue this appeal. And, if We consider the fact that after the expiration of the original period of the lease contract executed by respondent Nombre in favor of Escanlar, a new contract in favor of said Escanlar, was executed on May 1, 1963, by the new administrator Campillanos. who, incidentally, did not take any active participation in the present appeal, the right of petitioner to the fishpond becomes a moot and academic issue, which We need not pass upon. WHEREFORE, the decision appealed from should be, as it is hereby affirmed, in all respects, with costs against petitioner Moises San Diego, Sr. LUZ CARO, petitioner, vs. HONORABLE COURT OF APPEALS and BASILIA LAHORRA VDA. DE BENITO, AS ADMINISTRATRIX OF THE INTESTATE ESTATE OF MARIO BENITO , respondents. G.R. No. L-46001 March 25, 1982 This is a petition for certiorari under Rule 45 of the Revised Rules of Court seeking a review of the decision of the Court of Appeals, 1 promulgated on February 11, 1977, in CA-G.R. No. 52570-R entitled
"Basilia Lahorra Vda. de Benito, as Administratrix of the Intestate Estate of Mario Benito vs. Luz Caro", as well as the resolution of the respondent Court, dated May 13, 1977, denying petitioner's Motion for Reconsideration.

The facts of the case are as follows: Alfredo Benito, Mario Benito and Benjamin Benito were the original co-owners of two parcels of land covered by Transfer Certificates of Title Nos. T-609 and T-610 of the Registry of Deeds of Sorsogon. Mario died sometime in January, 1957. His surviving wife, Basilia Lahorra and his father, Saturnino

Benito, were subsequently appointed in Special Proceeding No. 508 of the Court of First Instance of Sorsogon as joint administrators of Mario's estate. On August 26, 1959, one of the co-owners, Benjamin Benito, executed a deed of absolute sale of his one-third undivided portion over said parcels of land in favor of herein petitioner, Luz Caro, for the sum of P10,000.00. This was registered on September 29, 1959. Subsequently, with the consent of Saturnino Benito and Alfredo Benito as shown in their affidavits both dated September 15, 1960, Exhibits G and F respectively, a subdivision title was issued to petitioner Luz Caro over Lot I-C, under T.C.T. No. T-4978. Sometime in the month of May, 1966, private respondent Basilia Lahorra Vda. de Benito learned from an allegation in a pleading presented by petitioner in Special Proceeding No. 508 that the latter acquired by purchase from Benjamin Benito the aforesaid one-third undivided share in each of the two parcels of land. After further verification, she sent to petitioner thru her counsel, a written offer to redeem the said one-third undivided share dated August 25, 1966. Inasmuch as petitioner ignored said offer, private respondent sought to intervene in Civil Case No. 2105 entitled "Rosa Amador Vda. de Benito vs. Luz Caro" for annulment of sale and mortgage and cancellation of the annotation of the sale and mortgage involving the same parcels of land, but did not succeed as the principal case was dismissed on a technicality, that is, for failure to prosecute and the proposed intervenor failed to pay the docketing fees. Private respondent, thus, filed the present case as an independent one and in the trial sought to prove that as a joint administrator of the estate of Mario Benito, she had not been notified of the sale as required by Article 1620 in connection with Article 1623 of the New Civil Code. On the other hand, petitioner presented during the hearing of the case secondary evidence of the service of written notice of the intended sale to possible redemptioners in as much as the best thereof, the written notices itself sent to and Saturnino Benito, could not be presented for the reason that said notices were sent to persons who were already dead when the complaint for legal redemption was brought. Instead, the affidavit of Benjamin Benito, executed ante litem motam, attesting to the fact that the possible redemptioners were formally notified in writing of his intention to sell his undivided share, was presented in evidence. The deposition of Saturnino's widow was likewise taken and introduced in evidence, wherein she testified that she received and gave to her husband the written notice of the intended sale but that the latter expressed disinterest in buying the property. After hearing the evidence, the trial judge dismissed the complaint on the grounds that: (a) private respondent, as administratrix of the intestate estate of Mario Benito, does not have the power to exercise the right of legal redemption, and (b) Benjamin Benito substantially complied with his obligation of furnishing written notice of the sale of his one-third undivided portion to possible redemptioners. Private respondent's Motion for Reconsideration of the trial court's decision having been denied, she appealed to the respondent Court of Appeals contending that the trial Judge erred in I. . . not inhibiting himself from trying and deciding the case because his son is an associate or member of the law office of Atty. Rodolfo A. Madrid, the attorney of record of defendant-appellee in the instant case; II. . contending that Benjamin Benito complied with the provisions of Article 1623 of the Revised Civil Code that before a co-owner could sell his share of the property owned in common with the other co-heirs, he must first give written notice of his desire to his co-heirs; (p. 49, R.A.)

III. concluding that the fact that one of the administrators who was actively managing the estate was furnished a written notice by the co-owner of his desire to sell his share was enough compliance of the provisions of Article 1623 of the Civil Code for the reason that the intention of the law is only to give a chance to the new co-owner to buy the share intended to be sold if he desires to buy the same; (p. 50, R.A.) IV. . refusing to allow plaintiff to redeem the subject property upon authority of Butte vs. Manuel Uy & Sons, L-15499, Feb. 28, 1962 (p. 51, R.A.) and in consequently dismissing the complaint (p. 52, R.A.). In disposing of the aforesaid errors, the Court of Appeals finding for plaintiff (herein private respondent) held: 1. That it is not clear that Atty. Arcangel, son of the trial Judge, was legally associated as practitioner with counsel for Luz Caro; that it is not shown at any rate that plaintiff had asked for Judge Arcangel's disqualification and that at any rate also, in such factual situation, an optional ground for disqualification is addressed to his sound discretion with which it would not be correct for appellate court to interfere or overrule. 2. That since the right of the co-owner to redeem in case his share be sold to a stranger arose after the death of Mario Benito, such right did not form part of the hereditary estate of Mario but instead was the personal right of the heirs, one of whom is Mario's widow. Thus, it behooved either the vendor, Benjamin, or his vendee, Luz Caro, to have made a written notice of the intended or consummated sale under Article 1620 of the Civil Code. 3. That the recital in the deed of sale that the vendor notified his co-owners of his desire to dispose of his share, who all declined to buy, was but a unilateral statement and could not be proof of the notice required by the law. 4. That the registration of the deed of sale did not erase that right. 5. That the affidavit of notice executed on January 20, 1960 of Benjamin Benito declaring that written notices of the sale as required by law were duly sent to Alfredo Benito and Saturnino Benito, the latter in his capacity as administrator of the estate of Mario Benito, as well as the sworn statement of Saturnino Benito's widow dated November 18, 1968 confirming that her husband received the written notice of the sale referred to in Benjamin Benito's affidavit of notice would not satisfy that there was clear notice in writing of the specific term of the intended sale. Worse, Saturnino was only a co-administrator and hence, his unilateral act could not bind the principal because there was no less than a renunciation of a right pertaining to the heirs, under Article 1818, NCC, apart from the fact that the right of redemption is not within their administration. 6. That the further claim of defendant that offer to redeem was filed out of time and that there was no actual tender loses all importance, there being no date from which to count the 30-day period to redeem because there was no notice given. The dispositive part of the decision of the Court of Appeals reads as follows: IN VIEW THEREOF, this Court is constrained to reverse, as it now reverses, judgment appealed from, upon payment by plaintiff or deposit in Court, within 30 days after this judgment should have become final, of the sum of P10,000.00, defendant is ordered to execute a deed of redemption over the one-third share of BENJAMIN BENITO in favor of plaintiff for herself and as representative of the

children of Mario Benito and therefrom, to deliver said one-third share of BENJAMIN BENITO, costs against defendant-appellee. SO ORDERED. Upon denial of the motion for reconsideration, petitioner brought this petition for review raising the following errors: 1. Respondent Court erred in allowing the exercise of the right of legal redemption with respect to the lots in question. 2. Respondent Court erred when it made the finding that there was no notice in law from which to count the tolling of the period of redemption and that the sale was not made known at all to private respondent. The alleged first error of respondent Court is premised on the fact that the lot in question sought to be redeemed is no longer owned in common. Petitioner contends that the right sought to be exercised by private respondent in the case assumes that the land in question is under coownership, the action being based on Article 1620 of the New Civil Code which provides: A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or any of them, are sold to a third person. If the price of alienation is grossly excessive, the petitioner shall pay only a reasonable price. Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common. However, the fact is that as early as 1960, co-ownership of the parcels of land covered by Transfer Certificates of Title Nos. T-609 and T-610 was terminated when Alfredo Benito, Luz Caro and the Intestate Estate of Mario Benito, represented by administrators Saturnino Benito, as trustee and representative of the heirs of Mario Benito, agreed to subdivide the property. An agreement of partition, though oral, is valid and consequently binding upon the parties. (Hernandez vs. Andal, et al., 78 Phil. 196) A petition for subdivision was then filed for the purpose. This was accompanied by the affidavits of Alfredo Benito and Saturnino Benito, both dated September 15, 1960 to the effect that they agree to the segregation of the land formerly owned in common by Mario Benito, Alfredo Benito and Benjamin Benito. A subdivision plan was made and by common agreement Lot I-C thereof, with an area of 163 hectares, more or less, was ceded to petitioner. Thereafter, the co-owners took actual and exclusive possession of the specific portions respectively assigned to them. A subdivision title was subsequently issued on the lot assigned to petitioner, to wit, Transfer Certificate of Title No. T4978. In Caram, et al. vs. Court of Appeals, et al., 101 Phil. 315, a case squarely in point, this Court held: Inasmuch as the purpose of the law in establishing the right of legal redemption between co-owners is to reduce the number of participants until the community is done away with (Viola vs. Tecson, 49 Phil. 808), once the property is subdivided and

distributed among the co-owners, the community has terminated and there is no reason to sustain any right of legal redemption. Although the foregoing pronouncement has reference to the sale made after partition, this Court therein saw no difference with respect to a conveyance which took place before the partition agreement and approval by the court. Thus, it held: Nevertheless, the result is the same, because We held in Saturnino vs. Paulino, 97 Phil. 50, that the right of redemption under Article 1067 may be exercised only before partition. In this case the right was asserted not only after partition but after the property inherited had actually been subdividedinto several parcels which were assigned by lot to the several heirs. In refutation, private respondent argues that petitioner Luz Caro acted in bad faith and in fraud of the rights of the heirs of a deceased Mario Benito in obtaining a subdivision title over a one-third portion of the land in question which she brought from Benjamin Benito, and for this reason, she is deemed to hold said property in trust for said heirs. The rule, however, is it fraud in securing the registration of titles to the land should be supported by clear and convincing evidence. (Jaramil vs. Court of Appeals, 78 SCRA 420). As private respondent has not shown and proved the circumstances constituting fraud, it cannot be held to exist in this case. As aforesaid, a subdivision title has been issued in the name petitioner on the lot ceded to her. Upon the expiration of the term of one year from the date of the entry of the subdivision title, the Certificate of Title shall be incontrovertible (Section 38, Act 496). Since the title of petitioner is now indefeasible, private respondent cannot, by means of the present action, directly attack the validity thereof. Even on the assumption that there still is co-ownership here and that therefore, the right of legal redemption exists, private respondent as administratrix, has no personality to exercise said right for and in behalf of the intestate estate of Mario Benito. She is on the same footing as co-administrator Saturnino Benito. Hence, if Saturnino's consent to the sale of the one-third portion to petitioner cannot bind the intestate estate of Mario Benito on the ground that the right of redemption was not within the powers of administration, in the same manner, private respondent as co-administrator has no power exercise the right of redemption the very power which the Court of Appeals ruled to be not within the powers of administration. While under Sec. 3, Rule 85, Rules of Court, the administrator has the right to the possession of the real and personal estate of the deceased, so far as needed for the payment of the expenses of administration, and the administrator may bring and defend action for the recovery or protection of the property or right of the deceased (Sec. 2, Rule 88), such right of possession and administration do not include the right of legal redemption of the undivided share sold to a stranger by one of the co-owners after the death of another, because in such case, the right of legal redemption only came into existence when the sale to the stranger was perfected and formed no part of the estate of the deceased co-owner; hence, that right cannot be transmitted to the heir of the deceased co-owner. (Butte vs. Manuel Uy and Sons, Inc., 4 SCRA 526). Private respondent cannot be considered to have brought this action in her behalf and in behalf of the heirs of Mario Benito because the jurisdictional allegations of the complaint specifically stated that she brought the action in her capacity as administratrix of the intestate estate of Mario Benito. It is petitioner's contention that, assuming that private respondent may exercise the right of redemption, there was no compliance with the conditions precedent for the valid exercise thereof.

In Conejero et al. vs. Court of Appeals, et al., 16 SCRA 775, this Court explained the nature of the right of redemption in this wise: While the co-owner's right of legal redemption is a substantive right, it is exceptional in nature, limited in its duration and subject to strict compliance with the legal requirements. One of these is that the redemptioner should tender payment of the redemption money within thirty (30) days from written notice of the sale by the coowner. It has been held that this thirty-day period is peremptory because the policy of the law is not to leave the purchaser's title in uncertainty beyond the established 30-day period. (Butte vs. Manuel Uy and Sons, Inc., 4 SCRA 526). It is not a prescriptive period but is more a requisite or condition precedent to the exercise of the right of legal redemption. In the case at bar, private respondent alleged in her complaint that she learned of the sale sometime in May, 1966 upon receipt of a pleading in Special Proceeding No. 508 of the Court of First Instance of Sorsogon. She likewise alleged that she gave a letter informing petitioner of her desire to redeem the land on August 25, 1966. Clearly, three months have elapsed since the notice of the sale. Hence, petitioner claims that the thirty-day period of redemption has already expired. In addition, petitioner makes capital of the admission of private respondent that she already knew of the said transaction even before receipt of the said pleading (t.s.n., p. 16) as well as of the evidence presented that Saturnino Benito, the admittedly active administrator until 1966, duly received a written notice of the intended sale of Benjamin Benito's share. Said evidence consists of the affidavit of the vendor stating that the required notice had been duly given to possible redemptioners, the statement in the deed of sale itself and the deposition of Saturnino Benito's widow with respect to her receipt of the written notice. Finally, petitioner points to the records which disclose that private respondent knew of the subdivision (t.s.n., p. 25) and hence, rationalized that private respondent should have known also of the previous sale. Since We have ruled that the right of legal redemption does not exist nor apply in this case because admittedly a subdivision title (T.C.T. No. T-4978) has already been issued in the name of the petitioner on Lot I-C sold to her, it becomes moot and academic, if not unnecessary to decide whether private respondent complied with the notice requirements for the exercise of the right of legal redemption under Article 1623 of the New Civil Code. WHEREFORE, IN VIEW OF THE FOREGOING, the decision of the Court of Appeals is hereby REVERSED and SET ASIDE, and judgment is hereby rendered DISMISSING the complaint. ESTATE OF AMADEO MATUTE OLAVE, as represented by JOSE S. MATUTE, Judicial CoAdministrator in Sp. Proc. No. 25876, Court of First Instance of Manila, petitioner, vs. HONORABLE MANASES G. REYES, Presiding Judge of Branch III, Court of First Instance of Davao, Davao City; SOUTHWEST AGRICULTURAL MARKETING CORPORATION also known as (SAMCO); CARLOS V. MATUTE, as another Administrator of the Estate of Amadeo Matute Olave, Sp. Proc. No. 25876 CFI, Manila; and MATIAS S. MATUTE, as former Co-Administrator of the Estate of Amadeo Matute Olave, Sp. Proc. No. 25876, CFI, Manila, respondents. G.R. No. L-29407 July 29, 1983

In this petition for certiorari, the estate of Amadeo Matute Olave, represented by Jose S. Matute, Judicial Administrator in Sp. Proc. No. 25876, of the then Court of First Instance of Manila, assails the Order, dated November 10, 1967, of the respondent judge, approving the "Amicable Settlement" submitted by the parties in Civil Case No. 4623 of the then Court of First Instance of Davao, 16th Judicial District, Branch III, and prays that the said Order be set aside. The petition alleged that the estate of Amadeo Matute Olave is the owner in fee simple of a parcel of land containing an area of 293,578 square meters, situated in sitio Tibambam, barrio Tibambam, municipality of Sigaboy (now Governor Generoso), province of Davao, and covered by Original Certificate of Title No. 0-27 of the Registry of Deeds of Davao Province; that in April 1965 herein private respondent Southwest Agricultural Marketing Corporation (SAMCO), as plaintiff, filed Civil Case No. 4623 with the respondent Court of First Instance of Davao against respondents, Carlos V. Matute and Matias S. Matute, as defendants, in their capacities as co-administrators of the estate of Amadeo Matute Olave, for the collection of an alleged indebtedness of P19,952.11 and for attorney's fees of P4,988.02; that on May 8, 1965, defendants Carlos V. Matute and Matias S. Matute in said Civil Case No. 4623, filed an answer denying their lack of knowledge and questioning the legality of the claim of SAMCO; that on October 25, 1966 in Sp. Proc. No. 25876, the then Court of First Instance of Manila, Branch IV, issued an order directing the administrators to secure the probate court's approval before entering into any transaction involving the seventeen (17) titles of the estate, of which the property described in OCT No. 0-27 is one of them; that on October 20, 1967, the parties (plaintiff and defendants) in Civil Case No. 4623 of the Court of First Instance of Davao, submitted to the respondent court an Amicable Settlement whereby the property of the estate covered by OCT No. 0-27 of Davao was conveyed and ceded to SAMCO as payment of its claim; that the said Amicable Settlement signed by the herein respondents was not submitted to and approved by the then Court of First Instance of Manila, Branch IV, in Sp. Proc. No. 25876, nor notice thereof made to the beneficiaries and heirs in said special proceedings; that on November 10, 1967, respondent court, despite the opposition of the other parties who sought to intervene in Civil Case No. 4623 and despite the utter lack of approval of the probate court in Manila, approved the said Amicable Settlement and gave the same the enforceability of a court decision which, in effect, ceded the property covered by OCT No. 0-27, containing an area of 293,578 square meters and with an assessed value of P31,700.00 to SAMCO in payment of its claim for only P19,952.11; and, that if the said Order of respondent dated November 10, 1967 is not set aside, the same will operate as a judgment that "conveys illegally and unfairly, the property of petitioner-estate without the requisite approval of the probate court of Manila, which has the sole jurisdiction to convey this property in custodia legis of the estate. (par. 16, Petition). Made to answer, herein respondent SAMCO and respondent judge, among others, contend that the Amicable Settlement need not be approved by the probate court, "the same having been entered into in another independent action and in another court of co-equal rank. Article 2032 of the Civil Code applies only to extrajudicial compromise entered into by the administrators of the estate. In the alternative, lack of approval of the probate court of the Amicable Settlement does not render it null and void, but at most voidable, which must be the subject matter of a direct proceeding in the proper Court of First Instance." (p. 60, Rollo) In said Civil Case No. 4623 for sum of money, plaintiff SAMCO and defendants Carlos V. Matute and Matias S. Matute, in their capacities as judicial administrators of the estate of Amado Matute Olave in Special Proceeding No. 25876, Court of First Instance of Manila, Branch IV, submitted the following Amicable Settlement: 1. That defendants in their capacity as judicial administrators of the Estate of Amadeo Matute, hereby submit and acknowledge that the said Estate of Amadeo Matute is justly indebted to plaintiff in the total sum of P28,403.02 representing the

principal account of P19,952.11 and in the sum of P8,450.91 as attorney's fees, damages, interest and costs; 2. That at present the defendant estate is devoid of or does not have any funds with which to pay or settle the aforestated obligation in favor of the plaintiff, and that being so, the defendant estate through the undersigned administrators, decides to pay the plaintiff by way of conveying and ceding unto the plaintiff the ownership of a certain real property owned by the defendant estate now under the administration of the said undersigned administrators; 3. That plaintiff hereby accepts the offer of defendants of conveying, transferring and ceding the ownership of the above described property as full and complete payment and satisfaction of the total obligation of P28,403.02; 4. That the defendant estate, through the undersigned administrators hereby agree and bind the defendant estate to pay their counsel Atty. Dominador Zuho, of the Zufio Law Offices the sum of Eight Thousand (P8,000.00) Pesos by way of Attorney's Fee; 5. That the parties herein waive an other claims which they might have against one another. WHEREFORE, premises considered, it is respectfully prayed that this Honorable Court approves the foregoing settlement and that judgment be rendered transferring the said real property covered by Original Certificate of Title No. 0-27 to plaintiff Southwest Agricultural Marketing Corporation and that a new transfer certificate of title be issued to said plaintiff. (pp. 25-26, Rollo) Section 1, Rule 87 of the Rules of Court, provides that "no action upon a claim for the recovery of money or debt or interest thereon shall be commenced against the executor or administrator; ..." The claim of private respondent SAMCO being one arising from a contract may be pursued only by filing the same in the administration proceedings in the Court of First Instance of Manila (Sp. Proc. No. 25876) for the settlement of the estate of the deceased Amadeo Matute Olave; and the claim must be filed within the period prescribed, otherwise, the same shall be deemed "barred forever." (Section 5, Rule 86, Rules of Court). The purpose of presentation of claims against decedents of the estate in the probate court is to protect the estate of deceased persons. That way, the executor or administrator will be able to examine each claim and determine whether it is a proper one which should be allowed. Further, the primary object of the provisions requiring presentation is to apprise the administrator and the probate court of the existence of the claim so that a proper and timely arrangement may be made for its payment in full or by pro-rata portion in the due course of the administration, inasmuch as upon the death of a person, his entire estate is burdened with the payment of all of his debts and no creditor shall enjoy any preference or priority; all of them shag share pro-rata in the liquidation of the estate of the deceased. It is clear that the main purpose of private respondent SAMCO in filing Civil Case No. 4623 in the then Court of First Instance of Davao was to secure a money judgment against the estate which eventually ended in the conveyance to SAMCO of more than twenty-nine (29) hectares of land belonging to the estate of the deceased Amadeo Matute Olave in payment of its claim, without prior authority of the probate court of Manila, in Sp. Proc. No. 25876, which has the exclusive jurisdiction over the estate of Amadeo Matute Olave. It was a mistake on the part of respondent court to have

given due course to Civil Case No. 4623, much less issue the questioned Order, dated November 10, 1967, approving the Amicable Settlement. Section 1, Rule 73 of the Rules of Court, expressly provides that "the court first taking cognizance of the settlement of the estate of a decedent, shall exercise jurisdiction to the exclusion of all other courts." (Emphasis supplied). The law is clear that where the estate of the deceased person is already the subject of a testate or intestate proceeding, the administrator cannot enter into any transaction involving it without prior approval of the probate court. WHEREFORE, the petition for certiorari is GRANTED, and the Order, dated November 10, 1967, of the respondent court approving the Amicable Settlement of the parties in Civil Case No. 4623 of the then Court of First Instance of Davao, is hereby SET ASIDE. SO ORDERED.