In the matter of the testate estate of Basil Gordon Butler

Mercedes de Leon and Ada Loggey Ghezzi

vs
Manufacturer’s Life Insurance Co. thru Philippine Branch

FACTS:

Basil Gordon Butler, a former resident of the Philippines, died testate in Brooklyn, New
York in 1945. In the same year, his will was duly probated in the Surrogate’s Court of
New York County. The will contained a residuary clause by which the decedent allowed
the named executors to purchase an annuity for the benefit of Mercedes de Leon. In
accordance therewith, one of the executors, James Madison Ross Jr., bought an annuity
from the Manufacturer’s Life Insurance Co. in Toronto, Canada with the contract
stipulating a monthly payment of $57.60 to de Leon with the proviso that in the event
of her death, the residue shall be paid to Ross Jr. or his successor. With the object of
getting hold the entire amount invested in the annuity, de Leon presented Butler’s will
for probate in the CFI of Manila and secured the appointment of Ada Loggey Ghezzi as
administratrix. The latter filed a motion praying that the Manager of the Manufacturer’s
Life Insurance Co. Manila Branch to appear and render a complete accounting of funds
in its possession that purportedly belong to the estate of Butler. The CFI denied the
motion ruling. De Leon and Ghezzi appealed.

ISSUE:

Whether or not the Manila Court has authority over the assets involved

HELD:

No. Administration extends only to the assets of a decedent found within the state or
country where it was granted, so that an administrator appointed in one state or
country has no power over property in another state or country. The entire amount
invested in a contract of annuity by virtue of which the beneficiary receives a periodical
sum during her lifetime, no longer forms part of a decedent’s estate and is beyond the
control of the probate court. It has passed completely into the hands of the company in
virtue of a contract duly authorized and validly executed. Whether considered as a trust
or as simple consideration for the company's assumed obligation, which it has been
religiously performing, of paying periodical allowances to the annuitant, the proceeds of
the sale can not be withdrawn without the consent of the company, except, upon the
death of the annuitant, the residuary legatee may claim the remainder, if there be any.
Neither the domiciliary or ancillary executor of Butler's will, nor the trustee, nor the
annuitant has disposition of any of these funds beyond the amounts and except upon
the conditions agreed upon in the contract for annuity.