Intestate Estate of ARSENIO R. AFAN, deceased. MARIAN AFAN, petitioner and appellee, vs.

APOLINARIO S. DE GUZMAN, creditor and appellant.

1.DESCENT AND DISTRIBUTION; CLAIMS AGAINST THE ESTATE; WHEN FILED.—Prior to
the distribution of the estate of the deceased, on application of a creditor who has failed to file his
claim within the time provided for in Section 2, Rule 87, of the Rules of Court, the Court may allow
such claim to be filed, subject to the following conditions: (1) there must be an application
therefor; (2) a cause must be shown why the permission should be granted'; and (3) the
extension of time granted for the filing of the claim shall not exceed one month.
2.ID.; ID.; ID.; WHEN CLAIMANT NOT ENTITLED TO EXTENSION OF PERIOD FOR FILING
CLAIM.—The failure to file a claim within the time provided therefor upon the sole ground that the
claimant was negotiating with one of the heirs for payment, is not sufficient to justify the extension
of the reglementary period for the filing of the claim (In re: Estate of De Dios, 24 Phil., 573, 576).
840

840
PHILIPPINE REPORTS ANNOTATED
Afan vs. De Guzman
3.ID.; ID.; ID.; NEGLECT TO FILE CLAIM AFTER CLAIMANT HAD KNOWLEDGE OF DEATH
OF DECEDENT—Where a claimant knew of the death of the decedent and for four or five
months thereafter he did nothing to present his claim, the fact that he was negotiating with one of
the heirs can hardly be considered as a good excuse for such neglect (In re: Estate of Tiangco,
39 Phil., 967). Afan vs. De Guzman, 107 Phil. 839, No. L-14713 April 28, 1960

HEIRS OF RAMON PIZARRO, SR., petitioners, vs. HON. FRANCISCO Z. CONSOLACION, CFI
of Davao and LUIS TAN alias CHEN YEH-AN, respondents.
Remedial Law; Special Proceedings; Probate; Period of filing claims against the estate; Purpose
of fixing the period within which claims against the estate must be presented.—The range of the
period specified in the rule is intended to give the probate court the discretion to fix the period for
the filing of claims. The probate court if the by the rule to set the period provided it is not less than
six (6) months nor more than twelve (12) months from the day of the first publication of the notice
thereof. Such period once fixed by the court is mandatory. The purpose of the law, in fixing a
period within which claims against an estate must be presented, is to insure a speedy settlement
of the affairs of the deceased person and the person entitled to the same.
Same; Same; Same; Same; Where the notice issued and the period set by the trial court was not
in accordance with the requirements of the rules, the period fixed in the rules is not less than 6
months nor more than 12 months from date of first publication of notice.—Since the notice issued
and the period set by the trial court was not in accordance with the requirements of Section 2,
Rule 86 of the Rules of
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* FIRST DIVISION.
187

VOL. 161, MAY 9, 1988

187
Heirs of Ramon Pizarro, Sr. vs. Consolacion
Court, what should then apply is the period as provided for by the rules which is not less than six
months nor more than twelve (12) months from the date of first publication of notice. The first
publication of the notice in the Mindanao Times was on March 30, 1978. Thus the two claims of
petitioners against the estate which were filed on March 5, 1979 and March 29, 1979 respectively
were filed on time.
Same; Same; Same; Appeals; Trial court with competence and jurisdiction to determine whether
the appeal involves a question of law or both questions of law and fact; Provision on erroneous
appeal under Sec. 3, Rule 50, when applicable.—We find the action taken by the trial court to be
well-taken. Certainly, it is within the competence and jurisdiction of the trial court to determine
whether the appeal interposed was based on pure questions of law or involves both questions of
law and facts in considering the appeal. The provision of Section 3, Rule 50 of the Rules of Court
applies only when the appeal is already brought to the Court of Appeals at which time it may,
instead of dismissing the appeal, upon determination that it involves a pure question of law, order
that the case be certified to this Court.
Same; Same; Same; Notice of appeal; Failure to indicate in the notice of appeal the court to
which appeal is being interposed, merely directory, and non-compliance therewith is not fatal to
the appeal.—It must be noted that in the notice of appeal it is not even required that the appellant
indicate the court to which its appeal is being interposed. The requirement is merely directory and
failure to comply with it or error in the court indicated is not fatal to the appeal. Heirs of Ramon
Pizarro, Sr. vs. Consolacion, 161 SCRA 186, No. L-51278 May 9, 1988
RICARDO M. GUTIERREZ, plaintiff-appellant, vs. LUCIA MILAGROS BARRETTO-DATU,
Executrix of the Testate Estate of the deceased MARIAGERARDO VDA. DE BARRETTO,
defendant-appellee.
Settlement of decedent's estate; Claims required to be presented against decedent's estate claim
for damages arising from breach of lease contract.—Theword "claims" as used in statutes
requiring the presentation of claims against a decedent's estate is generally construed to mean
debts or demands of a pecuniary nature which could have been enforced against the deceased in
his lifetime and could have been reduced to simple money judgments and among these are those
founded upon contract. (21 Am. Jur. 579). In the case at bar, the claim is for damages arising
from a breach of a lease contract allegedly committed by the decedent. It falls squarely under
section 5, Rule 87 of the Rules of Court.
Same; Same; Actions that may be instituted against executors or administrators.—The only
actions that may be instituted against the executor or administrator are those to recover real or
personal property from the estate, or to enforce a lien thereon, and actions to recover damages
for an injury to person or property, real or personal, (Rule 88, Sec. 1). The instant suit is not one
of them. Gutierrez vs. Barretto-Datu, 5 SCRA 757, No. L-17175 July 31, 1962

MARIA G. AGUAS, FELIX GUARDINO and FRANCISCO SALINAS, plaintiffs-appellants, vs.

HERMOGENES LLEMOS, deceased defendant substituted by his representatives, PERPETUA
YERRO-LLEMOS, HERMENEGILDO LLEMOS, FELINOLLEMOS and AMADO LLEMOS,
defendants-appellees.
Executor and Administrator; Claims against the estate of the deceased; Actions that are abated
by death.—Under Rule 87, section 5, of the Rules of Court, actions that are abated by death are:
(1) claims for funeral expenses and those for the last sickness of the decedent; (2) judgments for
money; and (3) "all claims for money against the decedent, arising from contract express or
implied". The phrase "contract express or implied" includes all purely personal obligations other
than those which have their source in delict ortort.(Leung Ben vs. O'Brien, 38 Phil. 182, 189-194).
Same; Same; Actions that Survive; Meaning of "injury" to property.—Actions that survive against
a decedent's executor or administrator are: (1) actions to recover real and personal property from
the estate; (2) actions to enforce a lien there-
960

960
SUPREME COURT REPORTS ANNOTATED
Aguas vs. Llemos
on; and (3) actions to recover damages for an injury to person or property (Rule 88). Injury to
property is not limited to injuries to specific property, but extends to other wrongs by which
personal estate is injured or diminished (Baker vs. Crandall, 47 Am. Rep. 126; also 171 A.L.R.,
1395). To maliciously cause a party to incur unnecessary expenses is injurious to that party's
property (Javier vs.Araneta, L-4369, August 31, 1953). Hence, a suit for damages therefor
survives the death of the defendant. Aguas vs. Llemos, 5 SCRA 959, No. L-18107 August 30,
1962
THE BANK OF THE PHILIPPINE ISLANDS, plaintiff and appellant, vs. V. CONCEPCION E
HIJOS, INC., and VENANCIO CONCEPCION, defendants and appellants. HENRY W. ELSER,
defendant and appellee.
1.CONTRACTS; STIPULATIONS "POUR AUTRUI."—The general rule that a contract affects only
the parties and privies thereto does not apply to stipulations pour autrui.
2.ID. ; ID.; INTENT TO BENEFIT THIRD PERSON.—To constitute a valid stipulation pour autrui,
it must be the purpose and intent of the stipulating parties to benefit the third person, and it is not
sufficient that the third person may be merely incidentally benefited by the stipulation.
3.ID. ; ID. ; OFFER AND ACCEPTANCE.—The ordinary rules of offer and acceptance are
applicable to stipulations pour autrui, and it is a cardinal rule that such stipulations must be
definitely accepted by the third person. The acceptance must be absolute, unconditional, and
identical with the terms of the offer.
4.MORTGAGES; LIABILITY OF PURCHASER OF MORTGAGED PROPERTY.—The doctrine
that the purchaser of mortgaged property thereby also assumes the liability for the entire
mortgage debt, and may be sued therefor by the creditor, has not been accepted in this
jurisdiction and is not in harmony with the provisions of the
807

VOL. 53, JULY 21, 1928

807
Bank of the P. I. vs. V. Concepcion e Hijos, Inc.
Civil Code (E. C. McCullough & Co. vs. Veloso and Serna, 46 Phil., 1).
5.ID.; PROCEDURE TO ENFORCE PAYMENT OF DEBT SECURED BY MORTGAGE OR
OTHER COLLATERAL SECURITY.—A creditor holding a claim, secured by mortgage or other
collateral security, against the estate of a deceased person has the election of one out of three
courses: (1) He may abandon his security and share in the general distribution of the assets of
the estate, or (2) he may foreclose, secure a deficiency judgment and prove his deficiency
judgment before the committee, or (3) he may rely upon his security alone, in which case he can
receive no share in the distribution of the assets of the estate.
6.ID.; ID.—In this case the bank did not abandon the security and took no steps of any sort before
the committee on claims and appraisals within the time limit provided for by sections 689 and 690
of the Code of Civil Procedure. It must therefore be regarded as having elected to rely on its
mortgage alone and can consequently have no personal judgment against the estate of the
defendant-appellee.
7.ID. ; ID.—In the foreclosure of a mortgage on property pertaining to the estate of a deceased
person, the amount of the deficiency cannot be determined before the foreclosure sale is made,
and the demand for its payment is a contingent claim within the meaning of sections 746-749 of
the Code of Civil Procedure.
8.ID.; ID.—The-claim for the deficiency must be presented to the committee on claims and
appraisals within the period fixed by sections 689 and 690 of the Code of Civil Procedure. If the
court, from the report of the committee or from the proofs exhibited to it, is satisfied that the
contingent claim is valid, the executor or administrator may be required to retain in his possession
sufficient assets to pay the claim when it becomes absolute. Bank of the P. I. vs. V. Concepcion e
Hijos, Inc., 53 Phil. 806, No. 27701 July 21, 1928
THE IMPERIAL INSURANCE, INC., plaintiff-appellee, vs. EMILIA T. DAVID, defendant-appellant.
Civil Law; Obligations; Joint and several obligation; If the husband and wife bound themselves
jointly and severally, in case of his death her liability is independent of and separate from her
husband’s
_______________

* FIRST DIVISION.
318

318
SUPREME COURT REPORTS ANNOTATED
Imperial Insurance, Inc. vs. David
liability, and she may be sued for the whole debt.—We find no merit in this appeal. Under the law
and well settled jurisprudence, when the obligation is a solidary one, the creditor may bring his
action in toto against any of the debtors obligated in solidum. Thus, if husband and wife bound
themselves jointly and severally, in case of his death her liability is independent of and separate
from her husband’s; she may be sued for the whole debt and it would be error to hold that the
claim against her as well as the claim against her husband should be made in the decedent’s
estate. (Agcaoili vs. Vda. de Agcaoili, 90 Phil. 97)
Same; Same; Same; Joint and several obligation distinguished from joint obligation.—In the case
at bar, appellant signed a joint and several obligation with her husband in favor of herein
appellee; as a consequence, the latter may demand from either of them the whole obligation. As
distinguished from a joint obligation where each of the debtor is liable only for a proportionate part
of the debt and the creditor is entitled only to a proportionate part of the credit, in a solidary
obligation the creditor may enforce the entire obligation against one of the debtors.
Same; Same; Special Proceedings; Settlement of estate of deceased debtors; Filing by creditor
of an action against the surviving solidary debtor alone, instead of instituting a proceeding for the
settlement of the estate of the deceased debtor wherein his claim could be filed, proper.—And, in
Manila Surety and Fidelity Co., Inc. vs. Villarama, et al., 107 Phil. 891, this Court ruled that the
Rules of Court provide the procedure should the creditor desire to go against the deceased
debtor, “but there is nothing in the said provision making compliance with such procedure a
condition precedent before an ordinary action against the surviving solidary debtors, should the
creditor choose to demand payment from the latter, could be entertained to the extent that failure
to observe the same would deprive the court jurisdiction to take cognizance of the action against
the surviving debtors. Upon the other hand, the Civil Code expressly allows the creditor to
proceed against any one of the solidary debtors or some or all of them simultaneously. Hence,
there is nothing improper in the creditor’s filing of an action against the surviving solidary debtors
alone, instead of instituting a proceeding for the settlement of the estate of the deceased debtor
wherein his claim could be filed.” Imperial Insurance, Inc. vs. David, 133 SCRA 317, No. L-32425
November 21, 1984
STRONGHOLD INSURANCE COMPANY, INC., petitioner, vs. REPUBLIC-ASAHI GLASS
CORPORATION, respondent.
Obligations and Contracts; Death of a Party; As a general rule, the death of either the creditor or
the debtor does not extinguish the obligation—obligations are transmissible to the heirs, except
when the transmission is prevented by the law, the stipulations of the parties, or the nature of the
obligation.—As a general rule, the death of either the creditor or the debtor does not extinguish
the obligation. Obligations are transmissible to the heirs, except when the transmission is
prevented by the law, the stipulations of the parties, or the nature of the obligation. Only
obligations that are personal or are identified with the persons themselves are extinguished by
death. Section 5 of Rule 86 of the Rules of Court expressly allows the prosecution of money
claims arising from a contract against the estate of a deceased debtor. Evidently, those claims are
not actually
_______________

* FIRST DIVISION.
180

180
SUPREME COURT REPORTS ANNOTATED
Stronghold Insurance Company, Inc. vs.
Republic-Asahi Glass Corporation
extinguished. What is extinguished is only the obligee’s action or suit filed before the court, which
is not then acting as a probate court.
Same; Same; Surety; Since death is not a defense that a party or his estate can set up to wipe
out the obligations under a performance bond, the surety cannot use such party’s death to
escape its monetary obligation.—In the present case, whatever monetary liabilities or obligations
Santos had under his contracts with respondent were not intransmissible by their nature, by
stipulation, or by provision of law. Hence, his death did not result in the extinguishment of those
obligations or liabilities, which merely passed on to his estate. Death is not a defense that he or
his estate can set up to wipe out the obligations under the performance bond. Consequently,
petitioner as surety cannot use his death to escape its monetary obligation under its performance
bond.
Same; Same; Same; Although the contract of surety is in essence secondary only to a valid
principal obligation, his liability to the creditor or promisee of the principal is said to be direct,
primary and absolute—he is directly and equally bound with the principal.—As a surety, petitioner
is solidarily liable with Santos in accordance with the Civil Code, which provides as follows: “Art.
2047. By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the
obligation of the principal debtor in case the latter should fail to do so.” If a person binds himself
solidarily with the principal debtor, the provisions of Section 4, Chapter 3, Title I of this Book shall
be observed. In such case the contract is called a suretyship.” x x x x x x x x x “Art. 1216. The
creditor may proceed against any one of the solidary debtors or some or all of them
simultaneously. The demand made against one of them shall not be an obstacle to those which
may subsequently be directed against the others, so long as the debt has not been fully
collected.” Elucidating on these provisions, the Court in Garcia v. Court of Appeals, 191 SCRA
493 (1990), stated thus: “x x x. The surety’s obligation is not an original and direct one for the
performance of his own act, but merely accessory or collateral to the obligation contracted by the
principal. Nevertheless, although the contract of a surety is in essence secondary only to a valid
principal obligation, his liability to the creditor or promisee of the principal is said to be direct,
primary and absolute; in other words, he is directly and equally bound with the principal. x x x.”
181

VOL. 492, JUNE 22, 2006

181
Stronghold Insurance Company, Inc. vs.
Republic-Asahi Glass Corporation
Same; Same; Same; The death of the principal debtor will not work to convert, decrease or nullify
the substantive right of the solidary creditor.—Under the law and jurisprudence, respondent may
sue, separately or together, the principal debtor and the petitioner herein, in view of the solidary
nature of their liability. The death of the principal debtor will not work to convert, decrease or
nullify the substantive right of the solidary creditor. Evidently, despite the death of the principal
debtor, respondent may still sue petitioner alone, in accordance with the solidary nature of the
latter’s liability under the performance bond. Stronghold Insurance Company, Inc. vs. Republic-
Asahi Glass Corporation, 492 SCRA 179, G.R. No. 147561 June 22, 2006

G.R. No. 170498.January 9, 2013.*

METROPOLITAN BANK & TRUST COMPANY, petitioner, vs. ABSOLUTE MANAGEMENT
CORPORATION, respondent.
Actions; Procedural Rules and Technicalities; The Rules of Court has not been intended to be
totally rigid. In fact, the Rules of Court provides that the Supreme Court “may require or allow the
filing of such pleadings, briefs, memoranda or documents as it may deem necessary within such
periods and under such conditions as it may consider appropriate; and if the petition is given due
course, the Supreme Court may require the elevation of the complete record of the case or
specified parts thereof within fifteen (15) days from notice.—The Court significantly pointed out in
F.A.T. Kee, 641 SCRA 390 (2011), that the requirement in Section 4, Rule 45 of the Rules of
Court is not meant to be an absolute rule whose violation would automatically lead to the
petition’s dismissal. The Rules of Court has not been intended to be totally rigid. In fact, the Rules
of Court provides that the Supreme Court “may require or allow the filing of such pleadings,
briefs, memoranda or documents as it may deem necessary within such periods and under such
conditions as it may consider appropriate”; and “[i]f the petition is given due course, the Supreme
Court may require the elevation of the complete record of the case or specified parts thereof
within fifteen (15) days from notice.” These provisions are in keeping with the overriding standard
that procedural rules should be liberally construed to promote their objective and to assist the
parties in obtaining a just, speedy and inexpensive determination of every action or proceeding.
Civil Law; Quasi-Contracts; Implied Contracts; Words and Phrases; The term “implied contracts,”
as used in our remedial law, originated from the common law where obligations derived from
quasi-contracts and from law are both considered as implied contracts. Thus, the term quasi-
contract is included in the concept “implied contracts” as used in the Rules of Court.—In Maclan
v. Garcia, 97 Phil. 119 (1955), Gabriel Maclan filed a civil case to recover from
_______________
* SECOND DIVISION.
226

226
SUPREME COURT REPORTS ANNOTATED
Metropolitan Bank & Trust Company vs. Absolute Management Corporation
Ruben Garcia the necessary expenses he spent as possessor of a piece of land. Garcia acquired
the land as an heir of its previous owner. He set up the defense that this claim should have been
filed in the special proceedings to settle the estate of his predecessor. Maclan, on the other hand,
contended that his claim arises from law and not from contract, express or implied. Thus, it need
not be filed in the settlement of the estate of Garcia’s predecessor, as mandated by Section 5,
Rule 87 of the Rules of Court (now Section 5, Rule 86). The Court held under these facts that a
claim for necessary expenses spent as previous possessor of the land is a kind of quasi-contract.
Citing Leung Ben v. O’Brien, 38 Phil. 182 (1918), it explained that the term “implied contracts,” as
used in our remedial law, originated from the common law where obligations derived from quasi-
contracts and from law are both considered as implied contracts. Thus, the term quasi-contract is
included in the concept “implied contracts” as used in the Rules of Court. Accordingly, liabilities of
the deceased arising from quasi-contracts should be filed as claims in the settlement of his
estate, as provided in Section 5, Rule 86 of the Rules of Court.
Same; Same; Principle of Unjust Enrichment; A quasi-contract involves a juridical relation that the
law creates on the basis of certain voluntary, unilateral and lawful acts of a person, to avoid unjust
enrichment.—A quasi-contract involves a juridical relation that the law creates on the basis of
certain voluntary, unilateral and lawful acts of a person, to avoid unjust enrichment. The Civil
Code provides an enumeration of quasi-contracts, but the list is not exhaustive and merely
provides examples. According to the CA, Metrobank’s fourth-party complaint falls under the
quasi-contracts enunciated in Article 2154 of the Civil Code. Article 2154 embodies the concept
“solutio indebiti” which arises when something is delivered through mistake to a person who has
no right to demand it. It obligates the latter to return what has been received through mistake.
Solutio indebiti, as defined in Article 2154 of the Civil Code, has two indispensable requisites:
first, that something has been unduly delivered through mistake; and second, that something was
received when there was no right to demand it.
Procedural Rules and Technicalities; Actions; The specific provisions of Section 5, Rule 86 of the
Rules of Court should prevail over the general provisions of Section 11, Rule 6 of the Rules of
Court; the
227

VOL. 688, JANUARY 9, 2013

227
Metropolitan Bank & Trust Company vs. Absolute Management Corporation
settlement of the estate of deceased persons (where claims against the deceased should be
filed) is primarily governed by the rules on special proceedings, while the rules provided for
ordinary claims, including Section 11, Rule 6 of the Rules of Court, merely apply suppletorily.—
We read with approval the CA’s use of the statutory construction principle of lex specialis derogat
generali, leading to the conclusion that the specific provisions of Section 5, Rule 86 of the Rules
of Court should prevail over the general provisions of Section 11, Rule 6 of the Rules of Court; the
settlement of the estate of deceased persons (where claims against the deceased should be
filed) is primarily governed by the rules on special proceedings, while the rules provided for
ordinary claims, including Section 11, Rule 6 of the Rules of Court, merely apply suppletorily.
Metropolitan Bank & Trust Company vs. Absolute Management Corporation, 688 SCRA 225, G.R.
No. 170498 January 9, 2013
ISIDORO SANTOS, plaintiff and appellant, vs. LEANDRA MANARANG, administratrix, defendant
and appellee.
1.EXECUTORS AND ADMINISTRATORS; ALLOWANCE AND PAYMENT OF CLAIMS; TIME
FOR PRESENTATION.—If the property of the estate has been properly inventoried, the
committee on claims regularly appointed, the publication of the notice required by law duly made,
and there has been no fraud in the proceedings, claims or debts which the law requires shall be
presented to the committee on claims must be presented to it within the limitation of time provided
in section 689 (Code Civ. Proc.) or they will be barred.
2.ID.; ID.; ID.; CONTRARY PROVISIONS IN THE WILL.—Directions in the testator's will that
such claims and debts, or any of them, shall be settled in some other manner are void as
opposed to public policy, at least where there are heirs by force of law.
3.ID.; ID.; ACTION AGAINST ADMINISTRATOR.—No action can be instituted directly against the
administrator of the estate for the collection of claims and debts which the committee on claims is
directed to pass upon.
4.ID.; ID.; ID.; DIRECTION IN WILL TO PAY DEBTS.—An itemized list of debts in the will of the
testator which he directs shall be paid does not obviate the necessity of presenting them to the
committee for allowance. Nor do such directions in a will indicate that it was the testator's desire
to have them paid without being probated in accordance with the probate procedure provided in
Act No. 190.
5.ID.; ID.; ID.; ID.; MISTAKE OF LAW.—If, because of such provisions in the will, a creditor fails
to present such claims to the committee in the belief that it is unnecessary, he is laboring under a
mistake of law for which no relief can be afforded by the courts. Santos vs. Manarang., 27 Phil.
209, No. 8235 March 19, 1914
ESTATE OF AMADEO MATUTE OLAVE, as represented by JOSE S. MATUTE, Judicial Co-
Administrator 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.
Remedial Law; Special Proceedings; Settlement of Estates; Probate Court; Purpose of
presentation of claims against decedents
_______________

* FIRST DIVISION.
768

768
SUPREME COURT REPORTS ANNOTATED
Estate of Olave vs. Reyes
of estate in the probate court.—The purpose of presentation of claims against decedents of the
estate in the probate court is to protect the estate of deceased persona. 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 shall
share pro-rata in the liquidation of the estate of the deceased.
Same; Same; Same; Same; Jurisdiction; Where the estate of a 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.—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.” (Italics 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. Estate of Olave vs. Reyes, 123 SCRA 767, No. L-29407 July 29,
1983
SALONGA HERNANDEZ & ALLADO, petitioner, vs. OLIVIA SENGCO PASCUAL and THE
HONORABLE COURT OF APPEALS, respondents.
Lawyers; Attorney’s Fees; Estate Proceedings; As a general rule, it is the executor or
administrator who is primarily liable for attorney’s fees due to the lawyer who rendered legal
services for the executor or administrator in relation to the settlement of the estate, and the
executor or administrator may seek reimbursement from the estate for the sums paid in attorney’s
fees if it can be shown that the services of the lawyer redounded to the benefit of the estate.—We
reiterate that as a general rule, it is the executor or administrator who is primarily liable for
attorney’s fees due to the lawyer who rendered legal services for the executor or administrator in
relation to the settlement of the estate. The executor or administrator may seek reimbursement
from the estate for the sums paid in attorney’s fees if it can be
_______________

* THIRD DIVISION.
450

450
SUPREME COURT REPORTS ANNOTATED
Salonga Hernandez & Allado vs. Pascual
shown that the services of the lawyer redounded to the benefit of the estate. However, if the
executor or administrator refuses to pay the attorney’s fees, the lawyer has two modes of
recourse. First, the lawyer may file an action against the executor or administrator, but in his/her
personal capacity and not as administrator or executor. Second, the lawyer may file a petition in
the testate or intestate proceedings, asking the court to direct the payment of attorney’s fees as
an expense of administration. If the second mode is resorted to, it is essential that notice to all the
heirs and interested parties be made so as to enable these persons to inquire into the value of
the services of the lawyer and on the necessity of his employment.
Same; Same; Same; A claim for attorney’s fees partakes the nature of an administration expense,
and the claim for reimbursement must be superior to the rights of the beneficiaries.—The
character of such claim for attorney’s fees bears reiteration. As stated in Escueta, 5 Phil. 405
(1905), it partakes the nature of an administration expense. Administration expenses include
attorney’s fees incurred in connection with the administration of the estate. It is an expense
attending the accomplishment of the purpose of administration growing out of the contract or
obligation entered into by the personal representative of the estate, and thus the claim for
reimbursement must be superior to the rights of the beneficiaries.
Same; Same; Same; Due Process; The requisite notice to the heirs, devisees, and legatees
about the claim for attorney’s fees against the estate is anchored on the constitutional principle
that no person shall be deprived of property without due process of law.—The requisite notice to
the heirs, devisees, and legatees is anchored on the constitutional principle that no person shall
be deprived of property without due process of law. The fact that these persons were designated
in the will as recipients of the testamentary dispositions from the decedent establishes their rights
to the succession, which are transmitted to them from the moment of the death of the decedent.
The payment of such attorney’s fees necessarily diminishes the estate of the decedent, and may
effectively diminish the value of the testamentary dispositions made by the decedent. These
heirs, devisees, and legatees acquire proprietary rights by reason of the will upon the moment of
the death of the decedent, incipient or inchoate as such rights may be. Hence, notice to these
interested persons of the claims for attorney’s fees is integral, so as to allow them to pose
451

VOL. 488, MAY 2, 2006

451
Salonga Hernandez & Allado vs. Pascual
any objections or oppositions to such claim which, after all, could lead to the reduction of their
benefits from the estate.
Same; Same; Same; Same; The failure of the lawyer to give notice to the heirs, devisees, and
legatees of his claim for attorney’s fees renders the claim inefficacious.—We reiterate that the
direct claim against the estate for attorney’s fees must be made with due notice to the heirs,
devisees, and legatees. The failure of petitioner to give such notice renders its present claim
inefficacious for now. Indeed, there is sufficient cause to dismiss outright petitioner’s Motion for
Writ of Immediate Execution filed with the Probate Court, for its failure to notify therein the other
persons interested in the estate of Doña Adela. Nonetheless, to authorize said outright denial at
this stage could unduly delay the settlement of the estate of Doña Adela, considering the
likelihood that petitioner would again pursue such claim for attorney’s fees as the right to which is
affirmed by law and jurisprudence.
Same; Same; Same; Same; In order not to unduly protract the settlement of the subject estate,
the Court deems it proper instead to mandate the Probate Court to treat the Motion for Writ of
Immediate Execution as a petition seeking a court order to direct the payment of attorney’s fees
as expenses of administration, but subject to the condition that petitioner give due notice to the
devisees and legatees so designated in the will of the claim prior to the requisite hearing thereon.
—In order not to unduly protract further the settlement of the estate of Doña Adela, the Court
deems it proper instead to mandate the Probate Court to treat the Motion for Writ of Immediate
Execution as a petition seeking a court order to direct the payment of attorney’s fees as expenses
of administration, but subject to the condition that petitioner give due notice to the other
designated devisees and legatees so designated in the will of the claim prior to the requisite
hearing thereon. Petitioner may as well seize such opportunity to formally amend or reconfigure
its motion to a petition to direct payment of attorney’s fees. Once this step is accomplished, there
should be no impediment to petitioner’s claim for recovery of attorney’s fees as reimbursement for
necessary administration expenses, within the terms established by law, jurisprudence, and this
decision. Salonga Hernandez & Allado vs. Pascual, 488 SCRA 449, G.R. No. 127165 May 2,
2006

In the matter of the estate of J. H. Ankrom, deceased. HEIRS OF RAFAEL GREGOIRE, claimants
and appellants, vs. ALBERT L. BAKER, administrator and appellee.
1.EXECUTORS AND ADMINISTRATORS) INSOLVENT ESTATE; FRAUDULENT CONVEYANCE
BY DECEDENT; REMEDY OF CREDITOR.—Where an 68tate in administration appears to be
insolvent, any creditor who believes that a conveyance of property executed in life by the
decedent was made in fraud of creditors may, by leave of the court, and upon giving bond to
indemnify the executor
76

76
PHILIPPINE REPORTS ANNOTATED
Heirs of Gregoire vs. Baker
or administrator against costs, commence an action in the name of the executor or administrator,
and recover the property thus fraudulently conveyed away. The personal representative of a
decedent is not under the peremptory duty of starting such action himself.
2.JUDGMENT; APPEAL; INTERLOCUTORY ORDER.—Orders made by a' court with reference
to the inclusion of items of property in the inventory or the exclusion of items therefrom are
manifestly of a purely discretionary, provisional, and interlocutory nature and are subject to
modification or change at any time during the course of the administration proceedings Such
orders are not conclusive of the rights of any one, and the order in question not final in the sense
necessary to make it appealable. Heirs of Gregoire vs. Baker, 51 Phil. 75, No. 27486 November
18, 1927
Sinforoso Pascual, plaintiff and appellant, vs. Ponciano S. Pascual et al., defendants and
appellees.
1.Executors and Administrators; Right to Sue and be Sued; Exception.—Under Rule 88, section
1, of the new Rules of Court, actions for the recovery or protection of the property or rights of the
deceased for causes which survive may be prosecuted or defended by his executor or
administrator. Upon the commencement of the testate or intestate proceedings, the heirs have no
standing in court in actions of the above character, except when the executor or administrator is
unwilling or fails or refuses to act, in which event the heirs may act in his place. Here, the fictitious
sale is alleged to have been made to the defendants, one of them, M. S. P., being the executor
appointed by the probate court. Such executor naturally would not bring an action against himself
for recovery of the fishpond. His refusal to act may, therefore, be implied. And this brings the case
under the exception.
2.Actions; Annulment of a Contract of Sale; Venue.—It appearing that the sale made by the
deceased to the defendants is alleged to be fictitious, with absolutely no consideration, it should
be regarded as a nonexistent, not merely null, contract. And there being no contract between the
deceased and the defendants, there is in truth nothing to annul by action. The action brought
cannot thus be for annulment of contract, but is one for recovery of a fishpond, a real action that
should be, as it has been, brought in Pampanga, where the property is located.
3.Testate or Intestate Proceedings; Questions as to Title to Property; Case at Bar.—The general
rule is that questions as to title to property cannot be passed upon in testate or intestate
proceedings. However, when, as in the instant case, the parties interested are all heirs of the
deceased claiming title under him, the question as to whether the transfer made by the latter to
the former is or is not fictitious, may properly be brought by motion in the testate or intestate
proceedings on or before the distribution of the estate among the heirs. This procedure is optional
to the parties concerned who may choose to bring a separate action as a matter of convenience
in the preparation or presentación of evidence, and accordingly, the action brought by the
appellant is not improper. Pascual vs. Pascual et al., 73 Phil., 561, No. 48140 May 4, 1942
MARIA VELASQUEZ, MARY GEORGE, NELLIE GEORGE, NOBLE GEORGE, and MAYBELLE
GEORGE, plaintiffs-appellants, vs. WILLIAM GEORGE, ROBERT GEORGE, ANDRES MUÑOZ,
ISAGANI BRIÑAS and CIRILO ASPERILLA, defendants-appellees, ERLINDA VILLANUEVA,
mortgagee-defendant-appellee.
Remedial Law; Civil Procedure; Jurisdiction; Where complaint sought to annul documents of title
vesting ownership of land to a mortgagee who is neither an officer, stockholder nor a corporate
director but a third party, jurisdiction over suit property belongs to the civil courts, not with the
Securities and Exchange Commission; Allegations of complaint determine jurisdiction of court and
the court which has already acquired jurisdiction over the subject matter is retained by it up to the
end of the litigation.—We agree with the plaintiffs-appellants. What the complaint sought to annul
were documents of title which vested ownership over the three parcels of land in question to
defendant-mortgagee Villanueva, who is neither an officer, a stockholder nor a director of the
corporation, but a third party. Clearly, the lower court had jurisdiction over the controversy. The
fact that the plaintiffs-appellants subsequently questioned the legality of the constitution of the
board of directors of the corporation did not divest the court of its jurisdiction to take cognizance
of the case. What determines jurisdiction of the court are the allegations in the complaint. If from
the same, the court has already acquired jurisdiction over the subject-matter, jurisdiction is
retained up to the end of the litigation. (See Lat v. Phil. Long Distance Co., 67 SCRA 425)
_______________

* FIRST DIVISION.
457

VOL. 125, OCTOBER 27, 1983

457
Velasquez vs. George
Same; Same; Same; Lower court not allowed to surrender its judicial prerogatives and relinquish
essentially judicial questions to an administrative agency for resolution.—Whether or not the
mortgage contract, with an unusual provision whereby the mortgagors waived their right to
redeem the mortgaged property, could be executed without proper approval of the probate court
and without notice to the widow and legitimate children of the deceased is a matter clearly within
the authority of a trial court to decide. If in the course of trial, the court believes that the validity of
the composition of the board of directors is absolutely necessary for resolution of the issues
before it, the remedy is, at most, to require that one issue to be threshed out before the Securities
and Exchange Commission and to hold in abeyance, the trial on the merits of the principal issues
in the meantime. Certainly, the solution is not for the lower court to surrender its judicial
prerogatives and relinquish essentially judicial questions to an administrative agency for
resolution.
Same; Special Proceedings; Settlement of Estate; General rule that pending proceedings for
settlement of estate, the heirs have no right to commence an action arising out of the rights
belong to the deceased which pertain to the administrator; Exception is where the administrator
had allegedly participated in the insidious machinations and conclusion to defraud the heirs.—We
also find without merit the defendant-mortgagee’s contention that the property party to file the
complaint is the administrator of the estate of Benjamin George. The administrator, Andres
Muñoz, is the same person charged by the plaintiffs-appellants to have voted in the board of
directors without securing the proper authority from the probate court to which he is accountable
as administrator. In Ramirez v. Baltazar (24 SCRA 918), we ruled that “since the ground of the
present action to annul the aforesaid foreclosure proceedings is the fraud resulting from such
insidious machinations and collusion in which the administrator has allegedly participated, it
would be far fetched to expect the said administrator himself to file the action in behalf of the
estate. And who else but the heirs, who have an interest to assert and to protect, would bring the
action? Inevitably, this case should fall under the exception, rather than the general rule that
pending proceedings for the settlement of the estate, the heirs have no right to commence an
action arising out of the rights belonging to the deceased.” The case at bar falls under such an
exception. Velasquez vs. George, 125 SCRA 456, No. L-62376 October 27, 1983
TEODORA A. RIOFERIO, VERONICA O. EVANGELISTA assisted by her husband ZALDY
EVANGELISTA, ALBERTO ORFINADA, and ROWENA O. UNGOS, assisted by her husband
BEDA UNGOS, petitioners, vs. COURT OF APPEALS, ESPERANZA P. ORFINADA, LOURDES
P. ORFINADA, ALFONSO ORFINADA, NANCY P. ORFINADA, ALFONSO JAMES P.
ORFINADA, CHRISTOPHER P. ORFINADA and ANGELO P. ORFINADA, respondents.
Remedial Law; Actions; Party-in-interest; Pending the filing of administration proceedings, the
heirs without doubt have legal personality to bring suit in behalf of the estate of the decedent in
accordance with the provision of Article 777 of the New Civil Code.—Pending the filing of
administration proceedings, the heirs without doubt have legal personality to bring suit in behalf of
the estate of the decedent in accordance with the provision of Article 777 of the New Civil Code
“that (t)he rights to succession are transmitted from the moment of the death of the decedent.”
The provision in turn is the foundation of the principle that the property, rights and obligations to
the extent and value of the inheritance of a person are transmitted through his death to another or
others by his will or by operation of law.
Same; Same; Same; Court recognized the legal standing of the heirs to represent the rights and
properties of the decedent under administration pending the appointment of an administrator.—
Even if administration proceedings have already been commenced, the heirs may still bring the
suit if an administrator has not yet been appointed. This is the proper modality despite the total
lack of advertence to the heirs in the rules on party representation, namely Section 3, Rule 3 and
Section 2, Rule 87 of the Rules of Court. In fact, in the case of Gochan v. Young, this Court
recognized the legal standing of the heirs to represent the rights and properties of the decedent
under administration pending the appointment of an administrator. Rioferio vs. Court of Appeals,
419 SCRA 54, G.R. No. 129008 January 13, 2004
CIRILO MODESTO, petitioner, vs. JESUS MODESTO, ET AL., ETC., respondents.
SETTLEMENT OF ESTATE OF DECEASED PERSONS; PROCEEDINGS WHEN PROPERTY
OF ESTATE is CONCEALED, EMBEZZLED OR CONVEYED FRAUDULENTLY.—If an executor
or administrator or any individual interested in the estate of the deceased, complains to the court
having jurisdiction of the estate that a person or persons are suspected of having concealed,
embezzled, or conveyed away any of the properties, real or personal, of the deceased, the court
may cite such suspected person or persons to appear before it and may examine him or them on
oath on the matter of such complaint. In such proceedings the trial court has no authority to
decide whether or not said properties belong to the estate or to the persons examined. If, after
such examination there is good reason to believe that said person or persons examined are
keeping properties belonging to the estate, then the administrator should file an ordinary action in
court to recover the same.
1 Modesto vs. Modesto, et al., 105 Phil. 1066, No. L-11801 June 30, 1959
POMPILLO VALERA and EUMELIA VALERA CABADO, petitioners, vs. HON. JUDGE SANCHO
Y. INSERTO, in his capacity as Presiding Judge, Court of First Instance of Iloilo, Branch 1, and
MANUEL R. FABIANA, respondents.
Nos. L-59867-68. May 7, 1987.*
EUMELIA V. CABADO, POMPILLO VALERA and HON. MIDPANTAO L. ADIL, petitioners-
appellants, vs. MANUEL FABIANA, JOSE GARIN and HON. COURT OF APPE ALS (Tenth
Division), respondents-appellants.
Remedial Law; Special Proceedings; Estates; Jurisdiction of probate court, Rule that a court of
first instance (now RTC) acting as a probate court exercises but limited jurisdiction and without
power to determine the issue of title to property claimed by a third person adversely to the
decedent; Exception; Reason for exception.—As regards the first issue, settled is the rule that a
Court of First Instance (now Regional Trial Court), acting as a Probate Court, exercises but
limited jurisdiction, and thus has no power to take cognizance of and determine the issue of title
to property claimed by a third person adversely to the decedent, unless the claimant and all the
other parties having legal interest in the property consent, expressly or impliedly, to the
submission of the question to the Probate Court for adjudgment, or the interests of third persons
are not thereby prejudiced, the reason for the exception being that the question of whether or not
a particular matter should be resolved by the Court in the exercise of its general jurisdiction or of
its limited jurisdiction as a special court (e.g., probate, land registration, etc), is in reality not a
jurisdictional but in essence of procedural one, involving a mode of practice which may be
waived.
Same; Same; Same; Same; Function of resolving whether or not property should be included in
the estate inventory is clearly within the probate court's competence, which determination is
merely provisional in character, Exception to the rule, not applicable in case at bar.—The facts
obtaining in this case, however, do not call for the application of the exception to the rule. As
already earlier stressed, it
_______________

* FIRST DIVISION.
534

534
SUPREME COURT REPORTS ANNOTATED
Valera vs. Inserto
was at all times clear to the Court as well as to the parties that if cognizance was being taken of
the question of title over the fishpond, it was not for the purpose of settling the issue definitely and
permanently, and writing "finis" thereto, the question being explicitly left for determination "in an
ordinary civil action/' but merely to determine whether it should or should not be included in the
inventory. This function of resolving whether or not property should be included in the estate
inventory is, to be sure, one clearly within the Probate Court's competence, although the Court's
determination is only provisional in character, not conclusive, and is subject to the final decision in
a separate action that may be instituted by the parties.
Same; Same; Same; Same; Hearing by the probate court on the issue arising from the parties'
conflicting claims over the fishpond, valid; Purpose of hearing; If a third person asserts a right to
the property contrary to the decedent's, the probate court has no authority to resolve the issue but
a separate action must be instituted.—The same norm governs the situation contemplated in
Section 6, Rule 87 of the Rules of Court, expressly invoked by the Probate Court in justification of
its holding a hearing on the issue arising from the parties' conflicting claims over the fishpond.
The examination provided in the cited section is intended merely to elicit evidence relevant to
property of the decedent from persons suspected of having possession or knowledge thereof, or
of having concealed, embezzled, or conveyed away the same. Of course, if the latter lays no
claim to the property and manifests willingness to turn it over to the estate, no difficulty arises; the
Probate Court simply issues the appropriate direction for the delivery of the property to the estate.
On the other hand, if the third person asserts a right to the property contrary to the decedent's,
the Probate Court would have no authority to resolve the issue; a separate action must be
instituted by the administrator to recover the property.
Same; Same; Same; Same; Probate court authorized to admit a complaint in intervention after
obtaining the consent of all interested parties to its assumption of jurisdiction over the question of
title to the properties.—Parenthetically, in the light of the foregoing principles, the Probate Court
could have admitted and taken cognizance of Fabiana's complaint in intervention, after obtaining
the consent of all interested parties to its assumption of jurisdiction over the question of title to the
fishpond, or ascertaining the absence of objection thereto, But it did not. It dismissed the
complaint in intervention instead. And all this is now water under the bridge.
535

VOL. 149, MAY 7, 1987

535
Valera vs. Inserto
Same; Same; Same; Same; Execution, not a case of; Where the determination by the probate
court of the question of title to the property was merely provisional, it cannot be the subject of
execution, and where the Torrens title to the property is not in the decedent's name but in others.
—Since the determination by the Probate Court of the question of title to the fishpond was merely
provisional, not binding on the property with any character of authority, definiteness or
permanence, having been made only for purposes of inclusion in the inventory and upon
evidence adduced at the hearing of a motion, it cannot and should not be subject of execution, as
against its possessor who has set up title in himself (or in another) adversely to the decedent, and
whose right to possess has not been ventilated and adjudicated in an appropriate action. These
considerations assume greater cogency where, as here, the Torrens title to the property is not in
the decedents' names but in others, a situation on which this Court has already had occasion to
rule.
Same; Same; Same; Same; Primary jurisdiction over title issue in court taking cognizance of
separate action, deemed superior to the contrary order of the probate court in the exercise of
provisional jurisdiction over the same question; Reason.—Since, too, both the Probate Court and
the estate administrators are one in the recognition of the proposition that title to the f ishpond
could in the premises only be appropriately determined in a separate action, the actual filing of
such a separate action should have been anticipated, and should not therefore have come as a
surprise, to the latter. And since moreover, implicit in that recognition is also the acknowledgment
of the superiority of the authority of the court in which the separate action is filed over the issue of
title, the estate administrators may not now be heard to complain that in such a separate action,
the court should have issued orders necessarily involved in or flowing from the assumption of that
jurisdiction. Those orders cannot in any sense be considered as undue interference with the
jurisdiction of the Probate Court. Resulting from the exercise of primary jurisdiction over the
question of ownership involving estate property claimed by the estate, they must be deemed
superior to otherwise contrary orders issued by the Probate Court in the exercise of what may be
regarded as merely secondary, or provisional, jurisdiction over the same question. Valera vs.
Inserto, 149 SCRA 533, No. L-56504, Nos. L-59867-68 May 7, 1987
ABS-CBN BROADCASTING CORPORATION, EUGENIO LOPEZ, JR., AUGUSTO ALMEDA-
LOPEZ, and OSCAR M. LOPEZ, petitioners, vs. OFFICE OF THE OMBUDSMAN, ROBERTO S.
BENEDICTO,** EXEQUIEL B. GARCIA, MIGUEL V. GONZALES, and SALVADOR (BUDDY)
TAN,** respondents.
Criminal Procedure; Actions; Death of the Accused; The death of the accused necessarily calls
for the dismissal of the criminal case against him, regardless of the institution of the civil case with
it; Civil liability based solely on the criminal action is extinguished, and a different civil action
cannot be continued and prosecuted in the same criminal action.—Consistent with People v.
Bayotas, 236 SCRA 239 (1994), the death of the accused necessarily calls for the dismissal of
the criminal case against him, regardless of the institution of the civil case with it. The civil action
which survives the death of the accused must hinge on other sources of obligation provided in
Article 1157 of the Civil Code. In such a case, a surviving civil action against the accused founded
on other sources of obligation must be prosecuted in a separate civil action. In other words, civil
liability based solely on the criminal action is extinguished, and a different civil action cannot be
continued and prosecuted in the same criminal action.
_______________

* THIRD DIVISION.
** Deceased.
60

60
SUPREME COURT REPORTS ANNOTATED
ABS-CBN Broadcasting Corporation vs. Office of the Ombudsman
Ombudsman; Appeals; Supreme Court do not review the Ombudsman’s exercise of discretion in
prosecuting or dismissing a complaint except when the exercise thereof is tainted with grave
abuse of discretion.—It is crystal clear that we do not interfere with the Ombudsman’s exercise of
his investigatory and prosecutory powers vested by the Constitution. In short, we do not review
the Ombudsman’s exercise of discretion in prosecuting or dismissing a complaint except when
the exercise thereof is tainted with grave abuse of discretion. ABS-CBN Broadcasting Corporation
vs. Office of the Ombudsman, 569 SCRA 59, G.R. No. 133347 October 15, 2008