Specpro feb 6 Compiled (but not digested)

D-9. Accountability ….R85

RULE 85: Accountability and Compensation of Executors and Administrators

Section 1. Executor or administrator chargeable with all estate and income. —

Except as otherwise expressly provided in the following sections,

every executor or administrator is chargeable in his account

with the whole of the estate of the deceased which has come into his possession,

at the value of the appraisement contained in the inventory;

with all the interest, profit, and income of such estate;

and with the proceeds of so much of the estate as is sold by him,

at the price at which it was sold.

Section 2. Not to profit by increase or lose by decrease in value. — No executor or administrator shall

profit by the increase,

or suffer loss by the decrease or destruction,

without his fault,

of any part of the estate.

He must account for the excess

when he sells any part of the estate for more than the appraisement,

and if any is sold for the less than the appraisement,

he is not responsible for the loss, if the sale has justly made.

If he settles any claim against the estate for less than its nominal value,

he is entitled to charge in his account

only the amount he actually paid on the settlement.

Section 3. When not accountable for debts due estate. —

No executor or administrator shall be accountable

for debts due the deceased

which remain uncollected without his fault.

Section 4. Accountable for income from realty used by him. —

If the executor or administrator uses or occupies any part of the real estate himself,

he shall account for it as may be agreed upon between him and the parties interested,

or adjusted by the court with their assent;

and if the parties do not agree upon the sum to be allowed,

the same may be ascertained by the court,

whose determination in this respect shall be final.

Section 5. Accountable if he neglects or delays to raise or pay money. —

When an executor or administrator neglects or

unreasonably delays to raise money,

by collecting the debts

or selling the real or personal estate of the deceased,

or neglects to pay over the money he has in his hands,

and the value of the estate is thereby lessened

or unnecessary cost or interest accrues,

or the persons interested suffer loss,

the same shall be deemed waste

and the damage sustained may be charged and allowed against him

in his account,

and he shall be liable therefor on his bond.

Section 6. When allowed money paid as cost. —

The amount paid by an executor or administrator

for costs awarded against him

shall be allowed in his administration account,

unless it appears that the action or proceeding in which the costs are taxed

was prosecuted or resisted

without just cause,

and not in good faith.

Section 7. What expenses and fees allowed executor or administrator. Not to charge for services as attorney. Compensation provided by will controls unless renounced. —

An executor or administrator shall be allowed

the necessary expenses

the care,

management,

and settlement of the estate,

and for his services,

four pesos per day for the time actually and necessarily employed,

or a commission upon the value of so much of the estate

as comes into his possession

and is finally disposed of by him

in the payment of debts,

expenses, legacies,

or distributive shares,

or by delivery to heirs or devisees,

of two per centum of the first five thousand pesos of such value,

one per centum of so much of such value as exceeds five thousand pesos and does not exceed thirty thousand pesos,

one-half per centum of so much of such value as exceed one hundred thousand pesos.

But in any special case,

where the estate is large,

and the settlement has been attended with great difficulty,

and has required a high degree of capacity on the part of the executor or administrator,

a greater sum may be allowed.

If objection to the fees allowed be taken,

the allowance may be re-examined on appeal.

If there are two or more executors or administrators,

the compensation shall be apportioned among them by the court according to the services actually rendered by them respectively.

When the executors or administrator is an attorney,

he shall not charge against the estate any professional fees for legal services rendered by him.

When the deceased by will makes some other provision

for the compensation of his executor,

that provision shall be a full satisfaction for his services

unless by a written instrument filed in the court

he renounces all claim to the compensation provided by the will.

Section 8. When executor or administrator to render account. — Every executor or administrator shall render an account of his administration

within one (1) year from the time of receiving letters testamentary or of administration,

unless the court otherwise directs

because of extensions of time for presenting claims against,

or paying the debts of, the estate,

or for disposing of the estate;

and he shall render such further accounts

as the court may require until the estate is wholly settled.

Section 9. Examinations on oath with respect to account —

The court may examine the executor or administrator upon oath

with respect to every matter relating to any account rendered by him,

and shall so examine him as to the correctness of his account

before the same is allowed,

except when no objection is made to the allowance of the account

and its correctness is satisfactorily established by competent proof.

The heirs, legatees, distributees, and creditors of the estate

shall have the same privilege as the executor or administrator of being examined on oath

on any matter relating to an administration account.

Section 10. Account to be settled on notice. —

Before the account of an executor or administrator is allowed,

notice shall be given to persons interested

of the time and place of examining and allowing the same;

and such notice may be given personally to such persons interested

or by advertisement in a newspaper or newspapers,

or both,

as the court directs.

Section 11. Surety on bond may be party to accounting. — Upon the settlement of the account of an executor or administrator, a person liable as surety in respect to such account may, upon application, be admitted as party to such accounting.

Picardal v. Lladas

 G.R. No. L-21309      December 29, 1967

BERNARDO PICARDAL and SEBASTIAN PICARDAL, petitioners, 

vs.

CENON LLADAS, respondent.

Concordio C. Diel and C. Noel for petitioners.

F. T. Tamargo for respondent.

ZALDIVAR, J.:

Petition for review of the decision of the Court of Agrarian Relations, dated December 20, 1962, in CAR Case No. 67, Lanao del Norte — 1960.

Sometime in 1950, petitioner Bernardo Picardal entrusted to respondent Cenon Lladas a piece of land with an area of about seven hectares, planted to some 812 fruit-bearing coconut trees, located at Samburan, Linamon, Lanao del Norte. This land formed part of the properties belonging to the conjugal partnership between petitioner BernardoPicardal and his wife, Aurea Burgos, who died in 1941, and was under judicial administration in Special Proceedings No. IL-227 of the Court of First Instance of Lanao del Norte. As of the date of the decision of the lower court, appealed from, this property was not yet partitioned among the heirs. When Bernardo Picardal entrusted the land to CenonLladas they had a verbal agreement that they would divide the coconut produce from the land on the basis of 1/3-2/3 in favor of the landowner and that Cenon Lladas, as tenant, would keep the coconut plantation clean. Cenon Lladas entered the landholding, harvested the nuts, processed the same into copra, and divided the harvest, after selling it, on the basis agreed upon.

On November 19, 1959, Demetrio P. Sira, Clerk of Court of the Court of First Instance of Lanao del Norte, wrote a letter to respondent Cenon Lladas informing the latter of his appointment as special administrator of the estate of the late Aurea Burgos, and advised said respondent take good care of the coconut plantation, with a warning that should he fail to do so within 30 days from receipt of the letter, he would be forced to take the corresponding action under the tenancy law.

In February, 1960, respondent Lladas harvested coconuts and processed them into copra. This was sold by petitioner Bernardo Picardal to the Lian Hong Company in Iligan City on March 1, 1960. The manager of said firm wrote on March 2, 1960 to petitioner Bernardo Picardal informing the latter that the copra processed by respondent CenonLladas had been mixed with fresh coconut meat, because of which 16% of the weight would be deducted for moisture content, and at the same time requested Picardal to adviseLladas to stop the undesirable practice.

On March 3, 1960, herein respondent Lladas filed with the Court of Agrarian Relations a petition against Bernardo Picardal, Cesar Montoya and Demetrio Sira, alleging in substance that he had been a tenant since 1948 on the said coconut landholding owned by Bernardo Picardal, and planted to about 800 fruit-bearing coconut trees, the produce of which was shared between them on a 1/3-2/3 basis; that on February 5, 1960, Bernardo Picardal, thru Cesar Montoya and Demetrio P. Sira, served on him (Lladas) a notice to vacate one-half of said landholding in order that it might be given to another tenant; that because of said act, he suffered damages in having been compelled to bring said action.

On March 14, 1960, Bernardo Picardal, Cesar Montoya and Demetrio Sira filed their answer alleging, among others, that the landholding in question was a part of the property of the late Aurea Burgos, wife of Bernardo Picardal, and was the subject of administration proceedings, the administrator being the special administrator; that they had no information about the notice of ejectment; and as special defenses, they alleged never having notified Cenon Lladas to vacate the premises, and that the landholding in question was under custodia legis.

In May, 1960, Cenon Lladas again harvested coconuts and processed them into copra. The copra was sold by Bernardo Picardal to Lian Hong Company of Iligan City at P34.50 per 100 kilos in the early part of June, 1960. From the proceeds of the sale, Bernardo Picardo delivered to Lladas the sum of P645.00 representing the latter's share.

Herein respondent Lladas never made further harvests after May, 1960 although he still had his house on the land and continued to raise short term crops therein.

On October 12, 1960, Cenon Lladas filed an amended petition eliminating Cesar Montoya as one of the respondents and substituting Sebastian Picardal in his place, and alleging that he (Lladas) had been ejected from the landholding in September, 1960 by Sebastian Picardal, with the knowledge and consent of Bernardo Picardal. CenonLladas further claimed that he had planted on the land 2,000 banana hills and 24 fruit trees, the produce of which he shared on a 50-50 basis with Bernardo Picardal, and that as a result of the ejectment, he suffered damages in not receiving his share of the produce.

Bernardo Picardal, Sebastian Picardal and Demetrio Sira filed their answer on October 25, 1960 denying the ejectment and averring that Cenon Lladas had abandoned for quite a long time the landholding in question, for which cause Sebastian Picardal had to post in the premises a notice against trespassing.

Cenon Lladas filed a second amended petition dated July 24, 1961, the amendment consisting principally in the substitution of Demetrio P. Sira, the former special administrator, by Rosalia P. Penpeña the newly appointed administratrix of the Picardal estate.

After trial, the Court of Agrarian Relations rendered a decision, dated December 20, 1962, ordering (1) Bernardo Picardal as landholder and Rosalia P. Penpeña as administrarix to reinstate Cenon Lladas to the landholding; (2) ordering Bernardo Picardal and Sebastian Picardal to pay, jointly and severally, the sum of four thousand five hundred fifteen (P4,515.00) pesos to Cenon Lladas, with interest at 6% per annum from the date of the filing of the amended petition on October 12, 1960, until fully paid; and (3) ordering said Bernardo Picardal and Sebastian Picardal to pay, jointly and severally, to Cenon Lladas the further sum of six hundred forty-five (P645.00) pesos every four months from January, 1963 during such period that said Cenon Lladas has not been actually reinstated to said landholding, and to pay the costs.

The motion for reconsideration of the decision having been denied, appeal was made to this Court by now petitioners Bernardo Picardal and Sebastian Picardal.

Herein petitioners have asserted in their petition the following grounds for review:

1. That the decision of the Court of Agrarian Relations in CAR Case No. 67 was not in accordance with law;

2. That the proceeds of the estate is in the hands of the administratrix and not with herein petitioners, hence, the damages assessed by the lower court should be levied against the intestate estate; and

3. That the ejectment of Cenon Lladas was not supported by substantial evidence.

This appeal has no merit.

Petitioners claim that the lower court erred in finding that herein respondent had been ejected, said finding not being supported by evidence. In support thereof, they quoted the testimony of Sebastian Picardal,1 who testified that respondent Cenon Lladas voluntarily abandoned the landholding in June, 1960, without having been advised to leave either by the special administrator, Demetrio Sira, or by his father, Bernardo Picardal; that Lladas left the land because he had already a piece of land in Bualan, Tubud, Lanao del Norte, and also because he was ashamed to the special administrator who had forbidden him from harvesting coconuts twice in three months.

This Court has consistently held that the findings of facts of the Court of Agrarian Relations will not be disturbed on appeal where there is substantial evidence to support them,2and all that this Court is called upon to do insofar as the evidence is concerned, is to find out if the conclusion of the lower court is supported by substantial evidence.3Substantial evidence in support of the findings of the Court of Agrarian Relations does not necessarily import preponderant evidence, as is required in an ordinary civil case. Substantial evidence has been defined to be such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, and its absence is not shown by stressing that there is contrary evidence on record, direct or circumstantial, as petitioners herein have done in quoting the contrary evidence consisting of the testimony of Sebastian Picardal, for the appellate court cannot substitute its own judgment or criterion for that of the trial court in determining wherein lies the weight of evidence or what evidence is entitled to belief.4

Even a cursory reading of the decision appealed from would reveal that the lower court arrived at its finding, that herein respondent Lladas had been ejected, after weighing the evidence of both parties and it gave its reasons for its conclusion together with the supporting facts.itc-alf The relevant portion of the decision reads thus:

Weighing the evidence of both parties, we find it easier to believe that respondent Bernardo Picardal and his son Sebastian had a more compelling motive in ousting the petitioner from the coconut plantation than had the latter in abandoning the same. As far back as March, 1960 when the copra harvest of February, 1960 was sold, respondent Bernardo Picardal had reason to be irked by the petitioner's act of mixing fresh coconut meat with his dried copra, thereby devaluating its quality. That the petitioner had been verbally told by the two Picardals, father and son, to stop making copra after the May, 1960 harvest, is corroborated by the circumstance that Sebastian Picardal, upon instructions by his father, put up a sign board inside the petitioner's coconut holding with a notice that "it is prohibited to whoever he is to take or to do anything with the coconuts, especially the squatters." A fair interpretation of the contents of the notice would show that it was intended for everyone, and that was what the petitioner understood by it, else he would not have put up his own sign board stating: "Do it because the law is yours.lawphil.net I have no fault."

On the other hand, there is no cogent reason for the petitioner to want to vacate his coconut holding The evidence shows that he is still raising short term corps and bananas inside said coconut holding. Unless he was out of his mind — and there is no evidence that he was or is — he would not voluntarily quit his coconut holding where he used to get an income of more than P600.00 every four months or over P1,860.00 a year and, at the same time, spend his efforts on his banana and corn holdings in the same land from which his income was negligible. It is true that the petitioner had applied for a homestead in Bualan, Tubod, Lanao del Norte. However, according to the evidence presented by the respondents themselves, the petitioner had transferred his rights over said homestead to one Mangolima Cuidato. (See Exh. "2" for respondents.) Furthermore, it should be noted that the instant case was instituted by the petitioner when he was only being threatened with ejectment but was not yet actually ejected from his coconut holding, and that he forthwith amended his complaint when his ouster materialized. All these facts and circumstances negate respondents' claim that the petitioner had abandoned his coconut holding.

It cannot be said, therefore, that the finding of the Court of Agrarian Relations that respondent Cenon Lladas was ejected was not supported by substantial evidence.

In support of the other grounds for review of the decision of the lower court, herein petitioners aver that when the alleged ejectment of Cenon Lladas took place sometime in September, 1960 (as stated in the lower court's decision), the entire conjugal estate of herein petitioner Bernardo Picardal and his deceased wife, which includes the landholding in question, was under the administration of the special administrator, Demetrio P. Sira. Petitioners claim that, not being the administrators but only overseers of the special administrator, they could not have ejected herein respondent, much less should they be held exclusively liable for the damages since they were only two of the heirs to the estate and they turned the proceeds of the landholding in question to the estate. They claim that the estate should be the one liable for the damages.

In answer thereto, respondent Cenon Lladas argues that the administration of the estate of the late Aurea Burgos covered only one-half of the estate, that is, the portion belonging to the deceased, and did not cover the one-half interest of respondent Bernardo Picardal, who retained control and management of his undivided share, and was, therefore, still the landholder, and that since it was Bernardo Picardal, with the help of his son, Sebastian, who ejected the tenant, Cenon Lladas, they alone should be responsible for the damages.

Petitioners are correct in saying that the entire conjugal partnership property of the marriage between petitioner Bernardo and the late Aurea Burgos is under administration.5 It follows that the estate was really the landlord of the landholding subject of the instant action.6 This fact does not justify, however, petitioners' claim that the estate should be the one liable for the illegal dispossession of the tenant perpetrated by herein petitioners, as found by the lower court.itc-alf Republic Act No. 1199, otherwise known as the Agricultural Tenancy Act, does not hold the landlord liable for damage in case of dispossession of the tenant under any and all circumstances. The landlord is liable when he is responsible for the unlawful ejectment; otherwise, he is not. Thus, according to Section 27 (1) of Republic Act No. 1199, it is the landlord who illegally dispossesses the tenant who is liable for damages. Section 49 of the same Act renders the third party himself who unlawfully dispossesses a tenant, liable for damages. Hence it is only when the dispossession is imputable to the landlord should the latter be liable for damages.

Bernardo Picardal and Sebastian Picardal were the ones who ejected Cenon Lladas, according to the finding of the lower court.lawphil.net They, therefore, Should be the ones to suffer the consequences of their unlawful act.

Petitioners' responsibility for the damages cannot be shifted to the intestate estate for various reasons, namely: .

First, petitioners' act of dispossessing the tenant was not the act of the estate, for they did not represent the estate. Its representative was the special administrator and it was not the special administrator who perpetrated the ejectment. Even if it be assumed, gratia argumenti, that the special administrator acquiesced to the ejectment, the estate would still not be liable, because if Section 5, Rule 85 of the Rules of Court makes the administrator himself liable for any waste committed in the estate through his negligence, with more reason would he be personally responsible, and not the estate, for the consequences of his unlawful act.

Second, the fact that the proceeds of the landholding in question, as claimed by petitioners, were turned over to the estate, would neither render the estate liable, because the intestate estate did not really benefit from the dispossession. Whether it was Cenon Lladas or petitioner Sebastian Picardal who was the tenant, the estate would have received the 2/3 share of the proceeds. The estate not having benefitted from the dispossession, besides not having been guilty of the unlawful act, it cannot be ordered to pay the damages awarded by the lower court.

Third, the intestate estate before partition is owned in common by all the heirs (Article 1078, Civil Code). A coownership should not suffer the consequences of the unlawful act of any of the coowners (Article 501, Civil Code). Hence the estate should not suffer from the consequences of the dispossession perpetrated by only two of the many heirs of the estate.

Fourth, Article 18 of the Civil Code, the application of which to the instant case is authorized both by Section 55 of the Agricultural Tenancy Act and Article 20 of the Civil Code, provides that "every person who, contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for the same." Hence, herein petitioners themselves, and not the intestate estate, should indemnify the respondent for the damages suffered by the latter on account of the unlawful dispossession.

We find that the lower court has not committed any of the errors assigned by herein petitioners.

IN VIEW OF THE FOREGOING, the decision of the lower court should be, as it is hereby, affirmed, with costs against the petitioners. It is so ordered.

De Guzman vs. Guzman Carillo

G.R. No. L-29276 May 18, 1978

Testate Estate of the Late Felix J. de Guzman. VICTORINO G. DE GUZMAN, administrator-appellee, 

vs.

CRISPINA DE GUZMAN-CARILLO, ARSENIO DE GUZMAN and HONORATA DE GUZMAN-MENDIOLA, oppositors-appellants.

Emiliano Samson & R. Balderama-Samson for appellants.

Cezar Paralejo for appellee.

AQUINO, J.:

This case is about the propriety of allowing as administration expenses certain disbursements made by the administrator of the testate estate of the late Felix J. de Guzman of Gapan, Nueva Ecija.

The deceased testator was survived by eight children named Victorino, Librada, Severino, Margarita, Josefina, Honorata, Arsenio and Crispina. His will was duly probated. Letters of administration were issued to his son, Doctor Victorino G. de Guzman, pursuant to the order dated September 17, 1964 of the Court of First Instance of Nueva Ecija in Special Proceeding No. 1431.

One of the properties left by the dent was a residential house located in the poblacion. In conformity with his last will, that house and the lot on which it stands were adjudicated to his eight children, each being given a one-eighthproindiviso share in the project of partition dated March 19, 1966, which was signed by the eight heirs and which was approved in the lower court's order of April 14, 1967 but without prejudice to the final outcome of the accounting.

The administrator submitted four accounting reports for the period from June 16, 1964 to September, 1967. Three heirs Crispina de Guzmans-Carillo Honorata de Guzman-Mendiola and Arsenio de Guzman interposed objections to the administrator's disbursements in the total sum of P13,610.48, broken down as follows:

I. Expense for the improvement and renovation of the decedent's residential house.

1. Construction of fence — P3,082.07

2. Renovation of bathroom — P1,389.52

3. Repair of terrace and

interior of house — P5,928.00 — P10,399.59

II. Living expenses of Librada de Guzman while occupying the family home without paying rent:

1. For house helper — P1,170.00

2. Light bills — 227.41

3. Water bills — 150.80

4. Gas oil, floor wax

and switch nail — 54.90 — P 1,603.11

III. Other expenses:

1. Lawyer's subsistence — P 19.30

2. Gratuity pay in lieu

of medical fee — 144.00

3. For stenographic notes — 100.00

4. For food served on

decedent's first

death anniversary — 166.65

5. Cost of publication of

death anniversary

of decedent — 102.00

6. Representation

expenses — 26.25 — P558.20

IV. Irrigation fee P1.049.58

TOTAL P13,610.48

It should be noted that the probate court in its order of August 29, 1966 directed the administrator "to refrain from spending the assets of the estate for reconstructing and remodeling the house of the deceased and to stop spending (sic) any asset of the estate without first during authority of the court to do so" (pp. 26-27, Record on Appeal).

The lower court in its order of April 29, 1968 allowed the d items as legitimate expenses of administration. From that order, the three oppositors appealed to this Court. Their contention is that the probate court erred in approving the utilization of the income of the estate (from rice harvests) to defray those expenditures which allegedly are not allowable under the Rules of Court.

An executor or administrator is allowed the necessary expenses in the care, management, and settlement of the estate. He is entitled to possess and manage the decedent's real and personal estate as long as it is necessary for the payment of the debts and the expenses of administration. He is accountable for the whole decedent's estate which has come into his possession, with all the interest, profit, and income thereof, and with the proceeds of so much of such estate as is sold by him, at the price at which it was sold (Sec. 3, Rule 84; Secs. 1 and 7, Rule 85, Rules of Court).

One of the Conditions of the administrator's bond is that he should render a true and just account of his administration to the court. The court may examine him upon oath With respect to every matter relating to his accounting 't and shall so examine him as to the correctness of his account before the same is allowed, except when no objection is made to the allowance of the account and its correctness is satisfactorily established by competent proof. The heirs, legatees, distributes, and creditors of the estate shall have the same privilege as the executor or administrator of being examined on oath on any matter relating to an administration account." (Sec. 1[c] Rule 81 and secs. 8 and 9, Rule 85, Rules of Court).

A hearing is usually held before an administrator's account is approved, especially if an interested Party raises objections to certain items in the accounting report (Sec. 10, Rule 85).

At that hearing, the practice is for the administrator to take the witness stand, testify under oath on his accounts and Identify the receipts, vouchers and documents evidencing his disbursements which are offered as exhibits. He may be interrogated by the court and crossed by the oppositors's counsel. The oppositors may present proofs to rebut the ad. administrator's evidence in support of his accounts.

I. Expenses for the renovation and improvement of the family residence — P10,399.59. — As already shown above, these expenses consisted of disbursements for the repair of the terrace and interior of the family home, the renovation of the bathroom, and the construction of a fence. The probate court allowed those expenses because an administrator has the duty to "maintain in tenantable repair the houses and other structures and fences belonging to the estate, and deliver the same in such repair to the heirs or devises" when directed to do so by the court (Sec. 2, Rule 84, Rules of Court).

On the other hand, the oppositors-appellants contend that the trial court erred in allowing those expenses because the same did not come within the category of necessary expenses of administration which are understood to be the reasonable and necessary expenses of caring for the property and managing it until the debts are paid and the estate is partitioned and distributed among the heirs (Lizarraga Hermanos vs. Abada, 40 Phil. 124).

As clarified in the Lizarraga case, administration expenses should be those which are necessary for the management of the estate, for protecting it against destruction or deterioration, and, possibly, for the production of fruits. They are expenses entailed for the preservation and productivity of the estate and its management for purposes of liquidation, payment of debts, and distribution of the residue among the persons entitled thereto.

It should be noted that the family residence was partitioned proindiviso among the decedent's eight children. Each one of them was given a one-eighth share in conformity with the testator's will. Five of the eight co-owners consented to the use of the funds of the estate for repair and improvement of the family home. It is obvious that the expenses in question were incurred to preserve the family home and to maintain the family's social standing in the community.

Obviously, those expenses redounded to the benefit of an the co- owners. They were necessary for the preservation and use of the family residence. As a result of those expenses, the co-owners, including the three oppositors, would be able to use the family home in comfort, convenience and security.

We hold that the probate court did not err in approving the use of the income of the estate to defray those ex

II. Expenses incurred by Librada de Guzman as occupant of the family residence without paying rent — P1 603.11 — The probate court allowed the income of the estate to be used for those expenses on the theory that the occupancy of the house by one heir did not deprive the other seven heirs from living in it. Those expenses consist of the salaries of the house helper, light and water bills, and the cost of gas, oil floor wax and switch nail

We are of the opinion that those expenses were personal expenses of Librada de Guzman, inuring y to her benefit. Those expenses, not being reasonable administration expenses incurred by the administrator, should not be charged against the income of the estate.

Librada de Guzman, as an heir, is entitled to share in the net income of the estate. She occupied the house without paying rent. She should use her income for her living expenses while occupying the family residence.

The trial court erred in approving those expenses in the administrator's accounts. They should be, as they are hereby, disallowed (See 33 C.J.S 1239-40).

III. Other expenses — P558.20. — Among these expenses is the sum of P100 for stenographic notes which, as admitted by the administrator on page 24 of his brief, should be disallowed. Another item, "representation expenses" in the sum of P26.25 (2nd accounting), was not explained. it should likewise be disallowed.

The probate court erred in allowing as expenses of ad. administration the sum of P268.65 which was incurred during the celebration of the first death anniversary of the deceased. Those expenses are disallowed because they have no connection with the care, management and settlement of the decedent's estate (Nicolas vs. Nicolas 63 Phil 332).

The other expenses, namely, P19.30 for the lawyer's subsistence and P144 as the cost of the gift to the physician who attended to the testator during his last s are allowable expenses.

IV. Irrigation fee — P1,049.58. —The appellants question the deductibility of that expense on the ground that it seems to be a duplication of the item of P1,320 as irrigation fee for the same 1966-67 crop-year.

The administrator in his comment filed on February 28, 1978 explained that the item of P1,320 represented the "allotments" for irrigation fees to eight tenants who cultivated the Intan crop, which allotments were treated as "assumed expenses" deducted as farming expenses from the value of the net harvests.

The explanation is not quite clear but it was not disputed by the appellants. The fact is that the said sum of P1,049.58 was paid by the administrator to the Penaranda Irrigation System as shown in Official Receipt No. 3596378 dated April 28, 1967. It was included in his accounting as part of the farming expenses. The amount was properly allowed as a legitimate expense of administration.

WHEREFORE, the lower court's order of April 29, 1968 is affirmed with the modifications that the sum of (a) P1,603.11 as the living expenses of Librada de Guzman. (b) P100 for stenographic notes, (c) P26.25 as representation expenses, and (d) P268.65 as expenses for the celebration of the first anniversary of the decedent's death are disallowed in the administrator's accounts. No costs.

SO ORDERED.

Escueta vs. Sy Juilliong

G.R. No. L-2370 December 12, 1905

MARIANO ESCUETA, plaintiff-appellant, 

vs.

LEON SY-JUILLIONG, defendant-appellee.

Mariano Escueta in his own behalf.

W.A. Kincaid for appellee.

WILLARD, J.:

In Manila, on the 21st of February, 1902, Joaquin Martinez Sy-Tiongtay executed his last will, whereby he disposed of an estate of 212,862 pesos among his five children, Carlos Pabia, Baldomero (the mother of these two being Chan-Sinnin), Felipa, Manuel, and Faustina (the mother of these three being Ana Cuanci). Apparently the testator's business was connected with shipping interests. He afterwards died, the exact date of his death not appearing in the record, and Sy-Giang was appointed his executor and at the time this case arose was in possession of the property left by the deceased. After the death of his father his son and heir, Baldomero, died, leaving no will, and leaving as his only heirs his brothers and sisters above named. When Baldomero died the property left by his father had not been divided, and he had an interest therein.

After the death of Baldomero, Carlos Pabia, his brother, employed the plaintiff, who is a lawyer, to procure the appointment of an administrator of the estate of Baldomero and to attend to the settlement of that estate in the Court of First Instance. The plaintiff, by virtue of such employment, performed services and expended money in procuring the appointment of the administrator, and in other work connected with the settlement of the estate. The person appointed as administrator of the estate of Baldomero was Carlos Pabia. Carlos Pabia died in the month of February, 1904, and the defendant was appointed administrator of the estate of Baldomero in succession to said Carlos, and this action was commenced against the defendant in his capacity as administrator of said estate, to recover the value of such services and the money so expended.

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

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

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

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

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

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

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

The court below ordered the action to be dismissed. This judgment should be modified so as to provide that the dismissal should be without prejudice to the right of the plaintiff to prosecute his claim against the person responsible therefor, or to make an application in the proceeding for the settlement of the estate of Baldomero for its allowance and payment. As so modified the judgment is affirmed. No costs will be allowed in this court, and after the expiration of twenty days let judgment be entered in accordance herewith and the case be returned to the court below for execution of said judgment. So ordered.

Occena vs. Marquez

G.R. No. L-27396 September 30, 1974

JESUS V. OCCEÑA and SAMUEL C. OCCEÑA, petitioners, 

vs.

HON. PAULINO S. MARQUEZ, District Judge, Court of First Instance of Bohol, Branch I, respondent. I.V. BINAMIRA, Co-Executor, Estate of W.C. Ogan, Sp. Proc. No. 423, CFI of Bohol, Intervenor.

Jesus V. Occeña and Samuel C. Occeña in their own behalf.

Hon. Paulino S. Marquez for and in his own behalf.

I.V. Binamira for and in his own behalf as intervenor.

ANTONIO, J.:p

In this petition for certiorari with mandamus, petitioners seek (1) to nullify the order of respondent Judge Paulino S. Marquez of the Court of First Instance of Bohol, Branch I, in Sp. Proc. No. 423 entitled "In the Matter of the Testate Estate of William C. Ogan," in relation to petitioners' claim for partial payment of attorney's fees in the amount of P30,000.00, dated November 2, 1966, fixing at P20,000.00 petitioners' attorney's fees, "which would cover the period March 1963 to December 1965," and directing its immediate payment minus the amount of P4,000.00 previously received by petitioners, and his second order, dated January 12, 1967, denying petitioners' motion for reconsideration and modifying the November 2, 1966 order by deleting therefrom the above-quoted phrase; (2) to direct the said court to approve the release to them as attorney's fees the amount of P30,000.00 minus the amount of P4,000.00 already advanced to them by the executrix; and (3) to allow petitioners to submit evidence to establish the total attorney's fees to which they are entitled, in case no agreement thereon is reached between them and the instituted heirs.

The gross value of the estate of the late William C. Ogan subject matter of the probate proceeding in Sp. Proc. No. 423 is more than P2 million. Petitioners, Atty. Jesus V. Occeña and Atty. Samuel C. Occeña, are the lawyers for the estate executrix, Mrs. Necitas Ogan Occeña, and they had been representing the said executrix since 1963, defending the estate against claims and protecting the interests of the estate. In order to expedite the settlement of their deceased father's estate, the seven instituted heirs decided to enter into compromise with the claimants, as a result of which the total amount of P220,000.00 in cash was awarded to the claimants, including co-executor Atty. Isabelo V. Binamira, his lawyers and his wife. A partial distribution of the corpus and income of the estate was made to the heirs in the total amount of P450,000.00. On November 18, 1966, the estate and inheritance taxes were completely settled by the executrix and the requisite tax clearance and discharge from liability was issued by the Commissioner of Internal Revenue.

Petitioners filed a Motion for Partial Payment of Attorneys' Fees, dated November 18, 1965, asking the court to approve payment to them of P30,000.00, as part payment of their fees for their services as counsel for the executrix since 1963, and to authorize the executrix to withdraw the amount from the deposits of the estate and pay petitioners. Three of the heirs, Lily Ogan Peralta, William Ogan, Jr. and Ruth Ogan, moved to defer consideration of the motion until after the total amounts for the executrix's fees and the attorney's fees of her counsel shall have been agreed upon by all the heirs. In July, 1966, five of the seven instituted heirs, namely, Lily Ogan Peralta, Necitas OganOccena, Federico M. Ogan, Liboria Ogan Garcia and Nancy Ogan Gibson, filed with the court a Manifestation stating that they had no objection to the release of P30,000.00 to petitioners as partial payment of attorney's fees and recommending approval of petitioners' motion.

Their first motion dated November 18, 1965 being still unresolved, petitioners filed a second Motion for Payment of Partial Attorneys' Fees, dated July 5, 1966, praying for the release to them of the amount of P30,000.00 previously prayed for by them. Action on the matter was, however, deferred in an order dated August 6, 1966, upon the request of the Quijano and Arroyo Law Offices in behalf of heirs William Ogan, Jr. and Ruth Ogan for deferment until after all the instituted heirs shall have agreed in writing on the total attorney's fees. Petitioners filed a Motion for Reconsideration under date of September 12, 1966, asking the court to reconsider its deferment order and praying that payment to them of P30,000.00 be approved on the understanding that whatever amounts were paid to them would be chargeable against the fees which they and the instituted heirs might agree to be petitioners' total fees.

On November 2, 1966, respondent Judge issued an order fixing the total fees of petitioners for the period March, 1963 to December, 1965 at P20,000.00. Petitioners moved to reconsider that order. On January 12, 1967, respondent issued an order not only denying petitioners' Motion for Reconsideration but also modifying the original order by fixing petitioners' fees for the entire testate proceedings at P20,000.00.

Petitioners contend that respondent Judge acted with grave abuse of discretion or in excess of jurisdiction in fixing the entire attorney's fees to which they are entitled as counsel for the executrix, and in fixing the said fees in the amount of P20,000.00. The reasons given by petitioners in support of their contention are: (1) the motion submitted by petitioners for the court's resolution was only for partied payment of their attorney's fees, without prejudice to any agreement that might later be reached between them and the instituted heirs on the question of total attorney's fees, yet respondent Judge resolved the question of total attorney's fees; (2) considering that the only question raised by petitioners for the court's determination was that of partial attorney's fees, they never expected the court to make a ruling on the question of total attorney's fees; consequently, petitioners did not have the opportunity to prove to total fees to which they were entitled, and, hence, they were denied due process of law; (3) of the seven heirs to the estate, five had agreed to petitioners' motion for partial payment to them of attorney's fees in the amount of P30,000.00, while the remaining two did not oppose the motion; (4) in his order, respondent Judge stated that he based the amount of P20,000.00 on the records of the case, but the amount of attorney's fees to which a lawyer is entitled cannot be determined on the sole basis of the records for there are other circumstances that should be taken into consideration; and (5) contrary to respondent Judge's opinion, the mere fact that one of the attorneys for the executrix is the husband of said executrix, is not a ground for denying the said attorneys the right to the fees to which they are otherwise entitled.

Only Judge Paulino S. Marquez is named respondent in the present petition, for, according to petitioners, "no proper party is interested in sustaining the questioned proceedings in the Lower Court."

In his Answer to the petition, respondent Judge alleged that (a) petitioners' proper remedy is appeal and not a special civil action, considering that there is already a final order on the motion for payment of fees; (b) petitioner Atty. Samuel Occeña is the husband of executrix Necitas Ogan Occeña, hence, Samuel Occeña's pecuniary interest now goes against the pecuniary interest of the four heirs he is representing in the special proceeding; (c) one reason why respondent Judge ordered the deletion of the phrase containing the period March, 1963 to December, 1965 from his November 2, 1966 order is that there are miscellaneous payments appearing in the compromise agreement and in the executrix's accounting which cover expenses incurred by petitioners for the estate; (d) co-executor I. V. Binamira should be included as party respondent to comply with Section 5, Rule 65 of the Revised Rules of Court; and (e) it is the duty of respondent Judge not to be very liberal to the attorney representing the executrix, who is at the same time the wife of said counsel and is herself an heir to a sizable portion of the estate, for respondent Judge's duty is to see to it that the estate is administered "frugally," "as economically as possible," and to avoid "that a considerable portion of the estate is absorbed in the process of such division," in order that there may be a worthy residue for the heirs. As special defenses, respondent Judge alleged that the seven instituted heirs are indispensable parties in this case; that mandamus cannot control the actuations of the trial court because they involved matters of discretion; and that no abuse of discretion can be imputed to respondent Judge for trying his best to administer the estate frugally.

On the arguments that he had opposed in the lower court petitioners' motion for payment of partial attorney's fees in the amount of P30,000.00, and that since petitioners Samuel C. Occeña and Jesus V. Occeña are the husband and father-in-law, respectively, of executrix Necitas Ogan Occeña, the latter cannot be expected to oppose petitioners' claims for attorney's fees, thus leaving the co-executor as the lone party to represent and defend the interests of the estate, Atty. I. V. Binamira, who claims to be co-executor of the Ogan estate, filed with this Court on July, 1967, a Motion for Leave to Intervene, which was granted in a resolution of August 9, 1967. Petitioners filed a Motion for Reconsideration of Resolution of August 9, 1967 and an Opposition to "Motion for Leave to Intervene," contending that Atty. Binamira ceased to be a co-executor upon his resignation effective October 29, 1965. On August 15, 1967, Atty. Binamira filed Intervenor's Opposition to Petition (answer in intervention) traversing the material averments of the petition.

On August 25, 1967, intervenor filed a Reply to Executrix's Opposition and Opposition to Exicutrix's Motion for Reconsideration. On September 18, 1967, intervenor filed Intervenor's Comments on Petitioners' Motion for Reconsideration of the Resolution dated August 9, 1961. On September 21, 1967, petitioners filed against intervenor a Petition for Contempt asking this Court to hold intervenor in contempt of court. We required intervenor to comment thereon. On October 9, 1967, petitioners filed a Supplemental Petition for Contempt. Invervenor filed on October 20, 1967, Intervenor's Comments and Counter Petition, asking this Court to dismiss petitioners' motion for indirect contempt and instead to hold petitioners guilty of indirect contempt for gross breach of legal ethics. We deferred action on the contempt motion until the case is considered on the merits. On January 15, 1968. Intervenor I. V. Binamira filed an Answer to Supplemental Petition. This was followed on February 12, 1968, by another Petition for Contempt, this time against one Generoso L. Pacquiao for allegedly executing a perjured affidavit dated December 20, 1967, to aid intervenor I. V. Binamira to escape liability for his deliberate falsehoods, which affidavit intervenor attached to his Answer to Supplemental Petition. On the same date, February 12, 1968, petitioners filed against intervenor a Second Supplemental Petition for Contempt. On February 19, 1968, petitioners filed Petitioners' Manifestation Re Documentary Evidence Supporting Charges.

We shall now consider the merits of the basic petition and the petitions for contempt.

I

The rule is that when a lawyer has rendered legal services to the executor or administrator to assist him in the execution of his trust, his attorney's fees may be allowed as expenses of administration. The estate is, however, not directly liable for his fees, the liability for payment resting primarily on the executor or administrator. If the administrator had paid the fees, he would be entitled to reimbursement from the estate. The procedure to be followed by counsel in order to collect his fees is to request the administrator to make payment, and should the latter fail to pay, either to (a) file an action against him in his personal capacity, and not as administrator, 1 or (b) file a petition in the testate or intestate proceedings asking the court, after notice to all the heirs and interested parties, to direct the payment of his fees as expenses of administration. 2 Whichever course is adopted, the heirs and other persons interested in the estate will have the right to inquire into the value, of the services of the lawyer and on the necessity of his employment. In the case at bar, petitioner filed his petition directly with the probate court.

There is no question that the probate court acts as a trustee of the estate, and as such trustee it should jealously guard the estate under administration and see to it that it is wisely and economically administered and not dissipated. 3 This rule, however, does not authorize the court, in the discharge of its function as trustee of the estate, to act in a whimsical and capricious manner or to fix the amount of fees which a lawyer is entitled to without according to the latter opportunity to prove the legitimate value of his services. Opportunity of a party to be heard is admittedly the essence of procedural due process.

What petitioners filed with the lower court was a motion for partial payment of attorney's fees in the amount of P30,000.00 as lawyers for the executrix for the period February, 1963, up to the date of filing of the motion on or about November 18, 1965. Five of the seven heirs had manifested conformity to petitioners' motion, while the remaining two merely requested deferment of the resolution of the motion "until the total amount for Executrix's fees and attorney's fees of her counsel is agreed upon by all the heirs." The court, however, in spite of such conformity, and without affording petitioners the opportunity to establish how much attorney's fees they are entitled to for their entire legal services to the executrix, issued an order fixing at P20,000.00 the entire attorney's fees of petitioners.

In his Order of January 12, 1967, respondent Judge explained:

The records of this case are before the Court and the work rendered by Atty. Samuel Occeña, within each given period, is easily visible from them; his work as revealed by those records is the factual basis for this Court's orders as to attorney's fees.

Whatever attorney's fees may have been approved by the Court on October 28, 1965 were as a result of compromise and were with the written consent of all the heirs and of all the signatories of the compromise agreement of October 27, 1965. That is not so with respect to Atty. Occeña's thirty-thousand peso claim for fees; and so, this Court, after a view of the record, had to fix it at P20,000.00. The record can reflect what an attorney of record has done.

In fixing petitioners' attorney's fees solely on the basis of the records of the case, without allowing petitioners to adduce evidence to prove what is the proper amount of attorney's fees to which they are entitled for their entire legal services to the estate, respondent Judge committed a grave abuse of discretion correctable by certiorari. Evidently, such fees could not be adequately fixed on the basis of the record alone considering that there are other factors necessary in assessing the fee of a lawyer, such as: (1) the amount and character of the service rendered; (2) the labor, time and trouble involved; (3) the nature and importance of the litigation or business in which the services were rendered; (4) the responsibility imposed; (5) the amount of money or the value of the property affected by the controversy or involved in the employment; (6) the skill and experience called for in the performance of the services; (7) the professional character and social standing of the attorney; and (8) the results secured, it being a recognized rule that an attorney may properly charge a much larger fee when it is contingent than when it is not. 4

It should be noted that some of the reasons submitted by petitioners in support of their fees do not appear in the records of the case. For instance, they claim that in connection with their legal services to the executrix and to the estate, petitioner Samuel C. Occeña had been travelling from Davao to Tagbilaran from 1965 to March, 1967, and from Davao to Cebu and Manila from 1963 to March, 1967, and that in fact he and his family had to stay for almost a year in Dumaguete City. These claims apparently bear strongly on the labor, time and trouble involved in petitioners' legal undertaking, and, consequently, should have been subject to a formal judicial inquiry. Considering, furthermore, that two of the heirs have not given their conformity to petitioners' motion, the need for a hearing becomes doubly necessary. This is also the reason why at this stage it would be premature to grant petitioners' prayer for the release to them of the amount of P30,000.00 as partial payment of their fees.

II

As stated above, petitioners have filed petitions for indirect contempt of court against intervenor I. V. Binamira charging the latter of having made false averments in this Court.

We have carefully considered these charges and the answers of intervenor, and, on the basis of the evidence, We conclude that intervenor I. V. Binamira has deliberately made false allegations before this Court which tend to impede or obstruct the administration of justice, to wit:

1. To bolster his claim that the executrix, without approval of the court, loaned P100,000.00 to the Bohol Land Transportation Company, Inc., intervenor submitted as Annex 5 of his Answer to Supplemental Petition a so-called "Real Estate Mortgage" which he made to appear was signed by Atty. Vicente de la Serna and the executrix. The certification of the Deputy Clerk of Court (Annex A-Contempt) shows that what intervenor claims to be a duly executed mortgage is in reality only a proposed mortgage not even signed by the parties.

2. Intervenor, in his Intervenor's Opposition to Petition, also stated that in December, 1965, the executrix, without the court's approval or of the co-executor's consent, but with petitioners' consent, loaned P100,000.00 to the Bohol Land Transportation Company, Inc. out of the estate's funds. The record shows that only P50,000.00 was loaned to the company to protect the investment of the estate therein, and that the same was granted pursuant to a joint motion signed among others, by intervenor, and approved by the court.

3. To discredit petitioner Samuel C. Occeña and his wife, the executrix, intervenor stated in his Intervenor's Opposition to Petition that less than a month after the loan of P100,000.00 had been granted to the transportation company, petitioner Samuel C. Occeña was elected president by directors of his own choosing in the Bohol Land Transportation Company, Inc., insinuating that in effect the executrix loaned to her husband the said sum of money. The certification of the corporate secretary of the Bohol Land Transportation Company, Inc. (Annex D-Contempt) states that petitioner Samuel C. Occeña was not the president of the company at the time, nor did he act as president or treasurer thereof, and that the president was Atty. Vicente de la Serna. This last fact is also shown in intervenor's own Annex 5 of his Answer to Supplemental Petition.

4. In intervenor's Opposition to this petition for certiorari, he stated that contrary to the executrix's statement in the 1965 income tax return of the estate that an estate "income of P90,770.05 was distributed among the heirs in 1965, there was in fact no such distribution of income. The executrix's project of partition (Annex E-Contempt) shows that there was a distribution of the 1965 income of the estate.

5. To discredit petitioner and the executrix, intervenor alleged in his Intervenor's Opposition to Petition that petitioners caused to be filed with the court the executrix's verified inventory which failed to include as assets of the estate certain loans granted to petitioner Samuel C. Occeña in the sum of P4,000.00 and to the executrix various sums totalling P6,000.00. The letters written by the late W. C. Ogan to his daughter, the executrix (Annexes F, G. and H-Contempt), show that the said sums totalling P10,000.00 were in reality partly given to her as a gift and partly for the payment of certain furniture and equipment.

6. Intervenor, in Order to further discredit petitioners and the executrix, stated in his Reply to Executrix's and Opposition to Executrix's Motion for Reconsideration that the executrix and petitioners refused to pay and deliver to him all that he was entitled to under the compromise agreement. The receipt dated October 29, 1965, signed by intervenor himself (Annex I-Contempt), shows that he acknowledged receipt from petitioner Samuel C. Occeña, lawyer for the executrix, the sum of P141,000.00 "in full payment of all claims and fees against the Estate, pursuant to the Agreement dated October 27, 1965."

7. In his Reply to Executrix's Opposition and Opposition to Executrix's Motion for Reconsideration, intervenor alleged that he signed Atty. Occeña's prepared receipt without receiving payment, trusting that Atty. Occeña would pay the amount in full, but later Atty. Occeña withheld Chartered Bank Check No. 55384 for P8,000.00 drawn in favor of intervenor and P15,000.00 in cash. A receipt signed by intervenor I. V. Binamira (Annex K-Contempt) shows that he acknowledged receipt of the check in question in the amount of P8,000-00 "intended for Mrs. Lila Ogan Castillo ... ." Anent the sum of P15,000.00 in cash, Annex J-Contempt (Reply to the Opposition for Authority to Annotate Interest, etc. filed by intervenor with the probate court) shows that intervenor, as movant, himself had alleged that "no check was issued to movant, but withdrawn amount of P15,000.00 was included in purchasing Manager's check No. 55398 for the Clerk of Court (deposit) for P75,000.00," for the said amount was voluntarily extended by intervenor as a favor and gesture of goodwill to form part of the total cash bond of P75,000.00 deposited with the Clerk of Court, as shown by a receipt signed by Atty. Samuel C. Occeña (Annex K-11-Contempt) which forms part of the record in the court below.

8. In his intervenor's Comments and Counter-Petition, intervenor denied the truth of petitioners' claim that intervenor had voluntarily and willingly extended the sum of P15,000.00 as a favor and gesture of goodwill to form part of the P75,000.00-deposit. In the Opposition to Motion of Executrix for Reconsideration of Order of February 19, 1966, dated April 16, 1966 (Annex K-2-Contempt), intervenor had, however, admitted that "out of the goodness of his heart ... in the nature of help," he had "willingly extended as a favor and gesture of goodwill" the said sum of P15,000.00.

9. To impugn the claim of petitioner Samuel C. Occeña that he stayed in Dumaguete City for almost one year to attend to the affairs of the estate, intervenor, in his intervenor's Opposition to Petition, alleged that said petitioner's stay in Dumaguete City was not to attend to the affairs of the estate, but to enable him to teach in Silliman University. The certification of the Director of the personnel office of Silliman University, dated December 4, 1967 (Annex V-Contempt) is, however, to the effect that their "records do not show that Atty. Samuel C. Occeña was teaching at Silliman University or employed in any other capacity in 1963, or at any time before or after 1963."

The foregoing are only some of the twenty-one instances cited by petitioners which clearly show that intervenor had deliberately made false allegations in his pleadings.

We find no rule of law or of ethics which would justify the conduct of a lawyer in any case, whether civil or criminal, in endeavoring by dishonest means to mislead the court, even if to do so might work to the advantage of his client. The conduct of the lawyer before the court and with other lawyers should be characterized by candor and fairness. It is neither candid nor fair for a lawyer to knowingly make false allegations in a judicial pleading or to misquote the contents of a document, the testimony of a witness, the argument of opposing counsel or the contents of a decision. Before his admission to the practice of law, he took the solemn oath that he will do no falsehood nor consent to the doing of any in court, nor wittingly or willingly promote or sue any false, groundless or unlawful suit, and conduct himself as a lawyer with all good fidelity to courts as well as to his clients. We find that Atty. Binamira, in having deliberately made these false allegations in his pleadings, has been recreant to his oath.

The charges contained in the counter-petition for indirect contempt of intervenor I. V. Binamira against petitioners have not been substantiated by evidence, and they must, therefore, be dismissed.

We note that no further action was taken on the petition for contempt filed by petitioners against Generoso L. Pacquiao, who executed the affidavit attached to intervenor's Answer to Supplemental Petition, the contents of which petitioners claim to be deliberate falsehoods. The said respondent Pacquiao not having been afforded an opportunity to defend himself against the contempt charge, the charge must be dismissed.

WHEREFORE, (1) the petition for certiorari is granted, and the court a quo is directed to hold a hearing to determine how much the total attorney's fees petitioners are entitled to, and (2) Atty. Isabelo V. Binamira, who appeared as intervenor in this case, is hereby declared guilty of contempt and sentenced to pay to this Court within ten (10) days from notice hereof a fine in the sum of Five Hundred Pesos (P500.00). Costs against intervenor.

D-10 Claims against Estate

RULE 86: Claims Against Estate

Section 1. Notice to creditors to be issued by court. —

 Immediately after granting letters testamentary or of administration,

the court shall issue a notice

requiring all persons having money claims against the decedent

to file them in the office of the clerk of said court.

Section 2. Time within which claims shall be filed. —

In the notice provided in the preceding section,

the court shall state the

time for the filing of claims against the estate,

which shall not be more than twelve (12) not less than six (6) months after the date of the first publication of the notice.

However, at any time before an order of distribution is entered,

on application of a creditor who has failed to file his claim within the previously limited,

the court may, for cause shown and on such terms as are equitable,

 allow such claim to be filed within a time not exceeding one (1) month.

Section 3. Publication of notice to creditors. —

Every executor or administrator shall,

immediately after the notice to creditors is issued,

cause the same to be published three (3) weeks successively in a newspaper of general circulation in the province,

and to be posted for the same period in four public places in the province and in two public places in the municipality where the decedent last resided.

Section 4. Filing of copy of printed notice. —

Within ten (10) days after the notice has been published and posted

in accordance with the preceding section,

the executor or administrator

shall file

or cause to be filed

in the court

a printed copy of the notice

accompanied with an affidavit setting forth

the dates of the first and last publication thereof

and the name of the newspaper in which the same is printed.

Section 5. Claims which must be filed under the notice. If not filed, barred; exceptions. —

All claims for money against the decent,

arising from contract,

express or implied,

whether the same be

due,

not due,

or contingent,

all claims for funeral expenses

and expense for the last sickness of the decedent,

and judgment for money against the decent,

must be filed within the time limited in the notice;

otherwise they are barred forever,

except that they may be set forth as counterclaims in any action that the executor or administrator may bring against the claimants.

Where an executor or administrator commences an action,

or prosecutes an action already commenced by the deceased in his lifetime,

the debtor may set forth by answer the claims he has against the decedent,

instead of presenting them independently to the court as herein provided, and mutual claims may be set off against each other in such action; and if final judgment is rendered in favor of the defendant, the amount so determined shall be considered the true balance against the estate,

as though the claim had been presented directly before the court in the administration proceedings.

Claims not yet due,

or contingent,

may be approved at their present value.

Section 6. Solidary obligation of decedent. —

Where the obligation of the decedent is solidary with another debtor,

the claim shall be filed against the decedent as if he were the only debtor,

without prejudice to the right of the estate to recover contribution from the debtor.

In a joint obligation of the decedent,

the claim shall be confined to the portion belonging to him.

Section 7. Mortgage debt due from estate. —

A creditor holding a claim against the deceased

secured by mortgage or other colateral security,

may abandon the security

and prosecute his claim in the manner provided in this rule,

and share in the general distribution of the assets of the estate;

or he may foreclose his mortgage or realize upon his security,

by action in court,

making the executor or administrator a party defendant,

and if there is a judgment for a deficiency,

after the sale of the mortgaged premises,

or the property pledged,

in the foreclosure or other proceeding to realize upon the security,

he may claim his deficiency judgment in the manner provided in the preceding section

or he may rely upon his mortgage or other security alone,

and foreclosure the same at any time within the period of the statute of limitations,

and in that event he shall not be admitted as a creditor,

and shall receive no share in the distribution of the other assets of estate;

but nothing herein contained shall prohibit the executor or administrator from redeeming the property mortgaged or pledged,

by paying the debt for which it is held as security,

under the direction of the court,

if the court shall adjudge it to be for the best interest of the estate that such redemption shall be made.

Section 8. Claim of executor or administrator against an estate. —

If the executor or administrator has a claim against the estate he represents,

he shall give notice thereof,

in writing,

to the court,

and the court shall appoint a special administrator,

who shall,

in the adjustment of such claim,

have the same power

and be subject to the same liability as the general administrator or executor in the settlement of other claims.

The court may order the executor or administrator

to pay to the special administrator necessary funds to defend such claim.

Section 9. How to file a claim. Contents thereof. Notice to executor or administrator. —

A claim may be filed by delivering the same with the necessary vouchers to the clerk of court

and by serving a copy thereof on the executor or administrator.

If the claim be founded on a bond, bill, note, or any other instrument,

the original need not be filed,

but a copy thereof with all indorsements shall be attached to the claim and filed therewith.

On demand, however, of the executor or administrator,

or by order of the court or judge,

the original shall be exhibited,

unless it be list or destroyed,

in which case the claimant must accompany his claim with affidavit or affidavits

containing a copy or particular description of the instrument and stating its loss or destruction.

When the claim is due,

it must be supported by affidavit stating the amount justly due,

that no payments have been made thereon which are not credited,

and that there are no offsets to the same,

 to the knowledge of the affiant.

If the claim is not due,

or is contingent,

when filed,

it must also be supported by affidavits stating the particulars thereof.

When the affidavit is made by a person other than the claimant,

he must set forth therein the reason why it is not made by the claimant.

The claim once filed shall be attached to the record of the case

in which the letters testamentary or of administration were issued,

 although the court,

in its discretion,

and as a matter of convenience,

may order all the claims to be collected in a separate folder.

Section 10. Answer of executor or administrator. Offsets —

Within fifteen (15) days after service of a copy of the claim on the executor or administrator,

he shall file his answer admitting

or denying the claim specifically,

and setting forth the admission or denial.

If he has no knowledge sufficient to enable him to admit or deny specifically,

he shall state such want of knowledge.

The executor or administrator in his answer shall allege in offset

any claim which the decedent before death had against the claimant,

and his failure to do so shall bar the claim forever.

A copy of the answer shall be served by the executor or administrator on the claimant.

The court in its discretion may extend the time for filing such answer.

Section 11. Disposition of admitted claim. —

Any claim admitted entirely by the executor or administrator

shall immediately be submitted by the clerk to the court

who may approve the same without hearing;

 but the court, in its discretion, before approving the claim,

may order that known heirs, legatees, or devisees be notified and heard.

If upon hearing,

an heir, legatees, or devisee opposes the claim,

the court may,

in its discretion, allow him fifteen (15) days to file an answer to the claim in the manner prescribed in the preceding section.

Section 12. Trial of contested claim. —

Upon the filing of an answer to a claim,

or upon the expiration of the time for such filing,

the clerk of court shall set the claim for trial

with notice to both parties.

The court may refer the claim to a commissioner.

Section 13. Judgment appealable. —

The judgment of the court approving or disapproving a claim,

shall be filed with the record of the administration proceedings

with notice to both parties,

and is appealable as in ordinary cases.

A judgment against the executor or administrator shall be that

he pay,

in due course of administration,

the amount ascertained to be due,

and it shall not create any lien upon the property of the estate,

or give to the judgment creditor any priority of payment.

Section 14. Costs.

— When the executor or administrator,

in his answer,

 admits and offers to pay part of a claim,

and the claimant refuses to accept the amount offered in satisfaction of his claim,

if he fails to obtain a more favorable judgment,

he cannot recover costs,

but must pay to the executor or administrator costs from the time of the offer.

Where an action commenced against the deceased for money

has been discontinued

and the claim embraced therein presented as in this rule provided,

the prevailing party shall be allowed the costs of his action up to the time of its discontinuance.

Salonga v. Pascual

G.R. No. 127165             May 2, 2006

SALONGA HERNANDEZ & ALLADO, Petitioner, 

vs.

OLIVIA SENGCO PASCUAL and THE HONORABLE COURT OF APPEALS, Respondents.

D E C I S I O N

TINGA, J.:

Petitioner, a professional law partnership, brings forth this Petition for Review assailing the Decision1 of the Court of Appeals dated 22 December 1995. The appellate court had affirmed two orders promulgated by the Malabon Regional Trial Court (RTC), Branch 72 (Probate Court), in Sp. Proc. No. 136-MN, entitled "In the Matter of Testate Estate of Doña Adela Pascual, Dr. Olivia S. Pascual, Executrix."

The case actually centers on two estate proceedings, that of Doña Adela Pascual (Doña Adela) and the other, her husband Don Andres Pascual's (Don Andres), who predeceased her. Don Andres died intestate, while Doña Adela left behind a last will and testament. The dispute over the intestate estate of Don Andres has spawned at least two cases already settled by this Court.2

On 1 December 1973, an intestate proceeding for the settlement of the estate of Don Andres was commenced by his widow Doña Adela before the then Court of First Instance, now Regional Trial Court of Pasig, Branch 23 (Intestate Court), docketed as Sp. Proc. No. 7554. Apart from his wife, who bore him no children, Don Andres was survived by several nephews and nieces from his full-blood and half-blood brothers.3 This proceeding proved to be the source of many controversies, owing to the attempts of siblings Olivia and Hermes Pascual, acknowledged natural children of Don Andres's brother, Eligio, to be recognized as heirs of Don Andres. Olivia and Hermes Pascual procured the initial support of Doña Adela to their claims. However, on 16 October 1985, the other heirs of Don Andres entered into a Compromise Agreement over the objections of Olivia and Hermes Pascual, whereby three-fourths (3/4) of the estate would go to Doña Adela and one-fourth (1/4) to the other heirs of Don Andres, without prejudice to the final determination by the court or another compromise agreement as regards the claims of Olivia and Hermes Pascual.4 Subsequently, the Intestate Court denied the claims of Olivia and Hermes Pascual. Said denial was eventually affirmed by this Court in 1992 in Pascual v. Pascual-Bautista,5 applying Article 992 of the Civil Code.

In the meantime, Doña Adela died on 18 August 1987, leaving behind a last will and testament executed in 1978, designating Olivia Pascual as the executrix, as well as the principal beneficiary of her estate. The will also bequeathed several legacies and devises to several individuals and institutions.

Olivia Pascual then engaged the services of petitioner in connection with the settlement of the estate of Doña Adela. Their agreement as to the professional fees due to petitioner is contained in a letter dated 25 August 1987, signed by Atty. Esteban Salonga in behalf of petitioner and Olivia Pascual. It is stipulated therein, among others, that the final professional fee "shall be 3% of the total gross estate as well as the fruits thereof based on the court approved inventory of the estate. Fruits shall be reckoned from the time of [Olivia Pascual's] appointment as executrix of the estate. The 3% final fee shall be payable upon approval by the court of the agreement for the distribution of the properties to the court designated heirs of the estate."6

On 26 August 1987, private respondent, represented by petitioner, commenced a petition for the probate of the last will and testament of Doña Adela before the Probate Court, docketed as Sp. Proc. No. 136-MN and raffled to Branch 72 presided by Judge Benjamin M. Aquino, Jr. The petition was opposed by a certain Miguel Cornejo, Jr. and his siblings, who in turn presented a purported will executed in 1985 by Doña Adela in their favor. 7

After due trial, on 1 July 1993, the Probate Court rendered a Decision8 allowing probate of the 1978 Last Will and Testament of Doña Adela and disallowing the purported 1985 Will. Letters testamentary were issued to Olivia Pascual.9 Cornejo attempted to appeal this decision of the Probate Court, but his notice of appeal was denied due course by the Probate Court, said notice "not having been accompanied by any record on appeal as required under the Interim Rules and by Rule 109 of the Rules of Court."10

On 27 July 1993, petitioner filed a Notice of Attorney's Lien equivalent to three percent (3%) of the total gross estate of the late Doña Adela S. Pascual as well as the fruits thereof based on the court approved inventory of the estate, pursuant to the retainer agreement signed by and between petitioner and Olivia S. Pascual, on 25 August 1987. In an Order dated 4 November 1993, the Probate Court ruled that petitioner's "notice of attorney's lien, being fully supported by a retainer's contract not repudiated nor questioned by his client Olivia S. Pascual, is hereby noted as a lien that must be satisfied chargeable to the share of Olivia S. Pascual."11 This was followed by another Order, dated 11 November 1993, wherein it was directed "that notice be x x x given, requiring all persons having claims for money against the decedent, Doña Adela S. Vda. de Pascual, arising from contracts, express or implied, whether the same be due, not due, or contingent, for funeral expenses and expenses of the last sickness of the said decedent, and judgment for money against her, to file said claims with the Clerk of Court at Malabon, Metro Manila, within six (6) months from November 4, 1993."12

Accordingly, on 22 November 1993, petitioner filed a Motion to Annotate Attorney's Lien on Properties of the Estate of Doña Adela Vda. de Pascual.13

It was at this stage, on 19 January 1994, that the Intestate Court rendered a Decision in Sp. Proc. No. 7554, finally giving judicial approval to the aforementioned 1985 Compromise Agreement, and partitioning the estate of Don Andres by adjudicating one-fourth (1/4) thereof to the heirs of Don Andres and three-fourths (3/4) thereof to the estate of Doña Adela. The Intestate Court also awarded attorney's fees to Atty. Jesus I. Santos, equivalent to 15% of the three-fourths (3/4) share of the estate of Doña Adela.14Olivia Pascual filed a petition for annulment of the award of attorney's fees with the Court of Appeals, but the same was denied, first by the appellate court, then finally by this Court in its 1998 decision in Pascual v. Court of Appeals.15

On 26 April 1994, petitioner filed a Motion for Writ of Execution for the partial execution of petitioner's attorney's lien estimated at P1,198,097.02. The figure, characterized as "tentative," was arrived at based on a Motion to Submit Project Partition dated 26 October 1993 filed by Olivia Pascual, which alleged the gross appraised value of Doña Adela's estate at P39,936,567.19. This sum was in turn derived from the alleged value of the total estate of Don Andres, three-fourths (3/4) of which had been adjudicated to Doña Adela. At the same time, petitioner noted that the stated values must be considered as only provisional, considering that they were based on a July 1988 appraisal report; thus, the claim for execution was, according to petitioner, without prejudice to an updated appraisal of the properties comprising the gross estate of Doña Adela.16

On 29 April 1994, Olivia Pascual, through Atty. Antonio Ravelo, filed her comment and/or opposition to the motion for the issuance of a writ of execution on attorney's fees. She argued that a lawyer of an administrator or executor should charge the individual client, not the estate, for professional fees. Olivia Pascual also claimed, citing jurisprudence17, that the counsel claiming attorney's fees should give sufficient notice to all interested parties to the estate, and that such was not accomplished by petitioner considering that no notices were given to the several legatees designated in Doña Adela's will.18 It was further argued that the motion for execution was premature, considering that the proceedings before the Intestate Court had not yet been terminated; that the computation of the figure of P1,198,097.02 was erroneous; and that the enforcement of the writ of execution on the undivided estate of Don Andres would prejudice his other heirs entitled to one-fourth (1/4) thereof.

On 2 June 1994, the Probate Court issued the first assailed order denying the motion for writ of execution in view of the fact that "the bulk of the estate of the late Doña Adela S. Vda. De Pascual is still tied-up with the estate of the late Don Andres Pascual, the proceedings over which and the final disposition thereof with respect to the partition and segregation of what is to form part of the estate of the late Doña Adela S. Vda. De Pascual is pending with another court sitting in Pasig, Metro Manila, and for having been prematurely filed."19

On 14 November 1994, Olivia Pascual, filed with the Probate Court a Motion to Declare General Default and Distribution of Testamentary Dispositions with Cancellation of Administrator's Bond. It was noted therein that no creditor had filed a claim against the estate of Doña Adela despite due notice published pursuant to Section 1, Rule 86 of the Rules of Court. The Probate Court was also informed of the fact that the proceedings before the Intestate Court had already been terminated by reason of the 14 January 1994 Decision rendered by the latter court. It was also stated "that the corresponding estate taxes had been paid as evidenced by the Estate Tax Return filed with the Bureau of Internal Revenue, and of the Certificate of Authority issued by the said agency."20 Interestingly, it was also manifested that two of the properties that formed part of the estates of the spouses, "the Ongpin Property" and "the Valenzuela Property," had in fact already been partitioned between the estate of Doña Adela and the heirs of Don Andres at the ratio of three-fourths (3/4) and one-fourth (1/4), respectively.

In response, petitioner filed a Comment/Manifestation praying that an order be issued:

(1) ordering the annotation of the attorney's lien on the properties comprising the estate of Doña Adela Pascual;

(2) a writ of partial execution be issued for the satisfaction of the attorney's lien of the undersigned counsel [herein petitioner] in relation to the Ongpin and Valenzuela properties for the amount of P635,368.14,without prejudice to the issuance of a writ of execution after the re-appraisal of the present market value of the estate and the determination of the amount due to [petitioner] as attorney's fees;

(3) ordering the appointment of a reputable appraisal company to re-appraise the present market value of the estate of Doña Adela Pascual including the fruits thereof for the purpose of determining the value of the attorney's fees of [petitioner]; and

(4) after the re-appraisal of the estate of Doña Adela Pascual a writ of execution be issued for the full satisfaction and settlement of the attorney's lien of [petitioner].21

On 17 March 1995, the Probate Court issued an order which denied petitioner's motion for a re-appraisal of the property and the issuance of a partial writ of execution "for being prematurely filed as there is no exact estate yet to be inventoried and re-appraised, assuming re-appraisal would be proper, because the bulk of the estate subject of this case, as far as this court is concerned, has not yet been turned over to the executrix or to the court itself."22

Through a petition for certiorari and mandamus, petitioner assailed the two orders of the Probate Court denying its motion for the immediate execution, partial or otherwise, of its claim for attorney's fees: the 2 June 1994 Order and the 17 March 1995 Order. Nonetheless, the twin orders of the RTC were affirmed by the Court of Appeals, effectively precluding petitioner's attempt to execute on its attorney's lien. The appellate court noted that the attorney's lien issued by the Probate Court was chargeable only to the share of Olivia Pascual, and not to the estate of Doña Adela, since it was Olivia Pascual who entered into the agreement with petitioner for the payment of attorney's fees in connection with the settlement of the estate of Doña Adela. Citing Lacson v. Reyes,23 the Court of Appeals asserted that as a rule an administrator or executor may be allowed fees for the necessary expenses he has incurred but he may not recover attorney's fees from the estate.

The Court of Appeals likewise noted that in the retainer agreement between petitioner and Olivia Pascual, it is stipulated that "the 3% final fee shall be payable upon approval by the court of the agreement for the distribution of the properties to the court designated heirs of the estate."24 On this score, the Court of Appeals ruled that as the petition before it did not show "that an agreement on the distribution of properties of the estate of Doña Adela S. Pascual has been submitted and approved by the probate court,"25 the filing of the motion for execution and that of the motion for re-appraisal of the market value of the estate were both premature.

Petitioner sought to reconsider the Decision of the Court of Appeals, but in vain.26 Hence this petition.

Petitioner argues that as held in Occeña v. Marquez,27 the counsel seeking to recover attorney's fees for legal services to the executor or administrator is authorized to file a petition in the testate or intestate proceedings asking the court, after notice to all the heirs and interested parties, to direct the payment of his fees as expenses of administration.28 Lacson, it is alleged, was inappropriately cited, since that case involved an executor who

concurrently was a lawyer who subsequently claimed attorney's fees as part of the expenses of administration. Petitioner also claims that the decision of the probate court admitting Doña Adela's will to probate sufficiently satisfies the condition in the Retainer Agreement that the final fee be payable "upon approval by the court of the agreement for the distribution of the properties to the court designated heirs of the estate," the court-approved will comprising the agreement referred to in the contract.

Petitioner also takes exception to the Probate Court's finding that "the bulk of the estate subject of this case, as far as this [c]ourt is concerned, has not been turned over to the executrix or to the [c]ourt itself," on which the appellate court predicated its ruling that the motion for a writ of execution was premature. Petitioner submits that the Probate Court ineluctably has jurisdiction over the estate of Doña Adela, and has necessarily assumed control over the properties belonging to the said estate. Thus, petitioner continues, there is no longer need to await the turnover of the properties involved in the intestate estate of Don Andres which constitute part of the testate estate of Doña Adela since the Probate Court and the Intestate Court have concurrent jurisdiction over these properties as they have not yet been physically divided.

Petitioner refers to the averment made by Olivia Pascual before the Probate Court that the proceedings before the Intestate Court had already been terminated, and that the proceeds of the sale of the Ongpin Property and the Valenzuela Property had in fact been already divided based on the three-fourths (3/4) to one-fourth (1/4) ratio between the estate of Doña Adela and the heirs of Don Andres. Petitioner further points out that the Probate Court had authorized and approved the sale of the Ongpin Property, yet refused to allow the partial execution of its claim for attorney's fees.

Finally, petitioner asserts that the Probate Court erred in refusing to grant the prayer seeking the re-appraisal of the property of Doña Adela's estate. Such re-appraisal, so it claims, is necessary in order to determine the three percent (3%) share in the total gross estate committed to petitioner by reason of the Retainer Agreement.

It appears that the thrust of the assailed Decision of the Court of Appeals is along these lines: that petitioner may directly claim attorney's fees only against Olivia Pascual and not against the estate of Doña Adela; and that petitioner's claim is also premature since contrary to the requisite stipulated in the Retainer Agreement, there is no court-approved agreement for the distribution of the properties of the estate of Doña Adela as yet.

As an initial premise, we consider whether a lawyer who renders legal services to the executor or administrator of an estate can claim attorney's fees against the estate instead of the executor or administrator. Petitioner correctly cites Occeña v. Marquez29 as providing the governing rule on that matter as previously settled in the 1905 case of Escueta v. Sy-Juilliong,30 to wit:

The rule is that when a lawyer has rendered legal services to the executor or administrator to assist him in the execution of his trust, his attorney's fees may be allowed as expenses of administration. The estate is, however, not directly liable for his fees, the liability for payment resting primarily on the executor or administrator. If the administrator had paid the fees, he would be entitled to reimbursement from the estate. The procedure to be followed by counsel in order to collect his fees is to request the administrator to make payment, and should the latter fail to pay, either to (a) file an action against him in his personal capacity, and not as administrator, or (b) file a petition in the testate or intestate proceedings asking the court, after notice to all the heirs and interested parties, to direct the payment of his fees as expenses of administration. Whichever course is adopted, the heirs and other persons interested in the estate will have the right to inquire into the value of the services of the lawyer and on the necessity of his employment.31

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 shown that the services of the lawyer redounded to the benefit of the estate.32 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.

Lacson v. Reyes,33 cited by the appellate court, involved an executor who also happened to be the lawyer for the heirs who had filed the petition for probate. For that reason, that case is not squarely in point to the case at bar. It was pronounced therein that the administrator or executor of the estate cannot charge professional fees for legal services against the same estate, as explicitly provided under Section 7, Rule 85 of the Rules of Court of 1985.34 No such rule exists barring direct recovery of professional legal fees from the estate by the lawyer who is not the executor or administrator of the said estate. The limitations on such direct recovery are nonetheless established by jurisprudence, as evinced by the rulings in Escueta and Occeña.

The character of such claim for attorney's fees bears reiteration. As stated in Escueta, it partakes the nature of an administration expense. Administration expenses include attorney's fees incurred in connection with the administration of the estate.35 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.36

Notwithstanding, there may be instances wherein the estate should not be charged with attorney's fees. If the costs of counsel's fees arise out of litigation among the beneficiaries thereof themselves or in the protection of the interests of particular persons, the estate generally cannot be held liable for such costs, although when the administrator employs competent counsel on questions which affect his/her duties as the administrator and on which he/she is in reasonable doubt, reasonable expenses for such services may be charged against the estate subject to the approval of the court.37 It has also been held that an administrator who brings on litigation for the deliberate purpose of defrauding the legitimate heirs and for his own benefit is not entitled to reimbursement for counsel's fees incurred in such litigation.381avvphil.net

Clearly then, while the direct recovery of attorney's fees from the estate may be authorized if the executor refuses to pay such fees, and claimed through the filing of the proper petition with the probate court, such claim remains controvertible. This is precisely why Escueta and its progenies require that the petition be made with notice to all the heirs and interested parties.

It is these perspectives that we apply to the case at bar. Notably, petitioner had filed both a Notice of Attorney's Lien and a Motion for Writ of Execution. These two pleadings have distinct character and must be treated as such.

After Doña Adela's will had been admitted to probate, petitioner had initially filed a Notice of Attorney's Lien wherein it identified itself as "the attorney for the executrix named in the said will, Dra. Olivia S. Pascual", and sought to file its "claim and/or lien for attorney's fees equivalent to Three Percent (3%) of the total gross estate," pursuant to the 1987 Retainer Agreement. Copies of this Notice of Attorney's Lien were furnished Attys. Fortunato Viray, Jr. and Crisanto Cornejo, who appear on record to have served as counsels for the various oppositors to the probate of the 1978 will of Doña Adela. This Notice of Attorney's Lien was noted by the Probate Court in its Order of 4 November 1993, "as a lien that must be satisfied chargeable to the share of Olivia S. Pascual."

It may be so that petitioner, in filing this Notice of Attorney's Lien, initially intended to hold Olivia Pascual, and not Doña Adela's estate, liable for the attorney's fees. It did identify itself as the lawyer of Olivia Pascual, and the Probate Court did note that the lien be satisfied chargeable to the share of the executor. Yet it must also be noted that such lien, as it is, is only contingent on the final settlement of the estate of Doña Adela, at such time, since the Retainer Agreement on which the lien is hinged provides that the final fee "be payable upon approval by the court of the agreement for the distribution of the properties to the court designated heirs of the estate."39 This is also made clear by the order noting the lien, which qualified that said lien was chargeable only to the share of Olivia Pascual, hence implying that at the very least, it may be claimed only after her share to Doña Adela's estate is already determinate.

In rendering its assailed Decision, the Court of Appeals relied on this qualification made by the Probate Court that the lien for attorney's fees was chargeable only to the share of Olivia Pascual. Yet the Notice of Attorney's Lien only seeks to serve notice of the pendency of the claim for attorney's fees, and not the payment of such fees itself. On its own, the Notice of Attorney's Lien cannot serve as the basis for the Probate Court to authorize the payment to petitioner of attorney's fees.

On the other hand, Escueta and its kindred cases do explicitly recognize the recourse for the lawyer to directly make the claim for attorney's fees against the estate, not the executor or administrator. The filing of the Notice of Attorney's Lien and the qualificatory character of the rulings thereon, do not preclude the resort to the mode of recovery against the estate as authorized by jurisprudence. Clearly then, we disagree with the opinion of the Court of Appeals that attorney's fees can be claimed only against the share of Olivia Pascual.

The instant case is rooted in an incomplete attempt to resort to the second mode of recovery of attorney's fees as authorized in Escueta, originating as it did from the denial of petitioner's Motion for Writ of Execution, and not the Notice of Attorney's Lien. The Motion did expressly seek the payment of attorney's fees to petitioner. Escueta and Occeña, among other cases, did clearly lay down the manner under which such fees may be paid out even prior to the final settlement of the estate as an administration expense directly chargeable to the estate itself. The critical question in the present petition is thus whether this Motion for Writ of Execution satisfies the requisites set in Escueta for a claim for attorney's fees directly chargeable against the estate. It does not.

The fact that the prayer for attorney's fees was cast in a motion and not a petition should not impede such claim, considering that the motion was nonetheless filed with the Probate Court. However, the record bears that the requisite notice to all heirs and interested parties has not been satisfied. Doña Adela's will designated 19 other individuals apart from Olivia Pascual, and four (4) different institutions as recipients of devises or legacies consisting of real properties, jewelries, and cash amounts. Yet only Olivia Pascual was served with a copy of the Motion for Writ of Execution, the motion which effectively sought the immediate payment of petitioner's attorney's fees. As early as 29 April 1994, Olivia Pascual, in opposing the Motion for Writ of Execution, already pointed out that petitioner had failed to give sufficient notice to all interested parties to the estate, particularly the several devisees and legatees so named in Doña Adela's will.

Such notice is material to the other heirs to Doña Adela's estate. The payment of attorney's fees, especially in the amount of 3% of the total gross estate as sought for by petitioner, substantially diminishes the estate of Doña Adela and may consequently cause the diminution of their devises and legacies. Since these persons were so named in the very will itself and the action for probate which was filed by petitioner itself, there is no reason why petitioner could not have given due notice to these persons on its claim for attorney's fees.

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.40The 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.41 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 any objections or oppositions to such claim which, after all, could lead to the reduction of their benefits from the estate.

The failure to notify the other heirs, devisees or legatees, to the estate of Doña Adela likewise deprives these interested persons of the right to be heard in a hearing geared towards determining whether petitioner was entitled to the immediate payment of attorney's fees. Notably, petitioner, in filing its Motion for Writ of Execution, had initially set the hearing on the motion on 29 April 1994, but one day prior to the scheduled hearing, gave notice instead that the motion was being submitted for the consideration of the Probate Court without further argument.42 Evidently, petitioner did not intend a full-blown hearing to ensue on whether it was entitled to the payment of attorney's fees. Yet the claim for attorney's fees is hardly incontrovertible.

That the Retainer Agreement set the attorney's fees at three percent (3%) of the gross estate does not imply that the basis for attorney's fees is beyond controversy. Attorney's fees in this case are in the nature of administration expenses, or necessary expenses in the first place. Any party interested in the estate may very well, in theory, posit a myriad of objections to the attorney's fees sought, such as for example, that these fees were not necessary expenses in the care, management, and settlement of the estate. Whether or not such basis for valid objections exists in this case is not evident, but the fact remains that all the parties interested in the estate, namely the other devisees and legatees, were deprived of the opportunity to raise such objections as they were not served notice of the Motion for Writ of Execution.

The instant claim for attorney's fees is thus precluded by the absence of the requisite notices by petitioner to all the interested persons such as the designated heirs, devisees, legatees, as required by the jurisprudential rule laid down in Escueta. However, the Court of Appeals held that it was the prematurity of the claim for attorney's fees that served as the fatal impediment. On this point, the Court does not agree.

Again, the remaining peripheral questions warrant clarification.

Escueta itself provides for two alternative approaches through which counsel may proceed with his claim for attorney's fees. The first involves a separate suit against the executor or administrator in the latter's personal capacity. The second approach is a direct claim against the estate itself, with due notice to all interested persons, filed with the probate court.

In the same vein, the existence of the Retainer Agreement between petitioner and Olivia Pascual allows petitioner two possible causes of action on which to claim attorney's fees in connection with the administration of the estate of Doña Adela. The first possible cause of action pivots on the Retainer Agreement, which establishes an obligation on the part of Olivia Pascual to pay the final fee of 3% of the gross total estate of Doña Adela, payable upon approval by the Probate Court of the agreement for the distribution of the properties to the court- designated heirs of the estate. Necessarily, since the recovery of attorney's fees is premised on the Retainer Agreement any award thereupon has to await the final ascertainment of value of the gross total estate of Doña Adela, as well as the approval by the Probate Court of the agreement for the distribution of the properties. The Retainer Agreement makes it clear that the final payment of attorney's fees is contingent on these two conditions,43 and the claim for attorney's fees based on the Retainer Agreement cannot ripen until these conditions are met.

Moreover, it cannot be escaped that the Retainer Agreement was entered into between petitioner and Olivia Pascual prior to the filing of the probate petition, and that at such time, she had no recognized right to represent the estate of Doña Adela yet. This

circumstance further bolsters our opinion that if petitioner insists on the judicial enforcement of the Retainer Agreement, its proper remedy, authorized by law and jurisprudence, would be a personal action against Olivia Pascual, and not against the estate of Doña Adela. If this were the recourse pursued by petitioner, and Olivia Pascual is ultimately held liable under the Retainer Agreement for attorney's fees, she may nonetheless seek reimbursement from the estate of Doña Adela if she were able to establish that the attorney's fees paid to petitioner were necessary administration expenses.

The second or alternative recourse is the direct claim for attorney's fees against the estate, as authorized under Escueta. The character of this claim is not contractual in nature, but rather, as a reimbursement for a necessary expense of administration, and it will be allowed if it satisfies the criteria for necessary expenses of administration. Its entitlement can be established by the actual services rendered by the lawyer necessary to the accomplishment of the purposes of administration, and not necessarily by the contract of engagement of the attorney's services.

By filing their claim directly against the estate of Doña Adela, petitioner has clearly resorted to this second cause of action. There are consequent advantages and disadvantages to petitioner. Since the claim arises irrespective of the contingencies as stipulated in the Retainer Agreement, the attorney's fees may be collected against the estate even before the final determination of its gross total value or the final approval of the project of partition. As earlier stated, such claim for reimbursement is superior to the right of the beneficiaries to the estate, and as such, there is need to finally determine the respective shares of the beneficiaries before attorney's fees in the nature of administration expenses may be paid out.

The one distinct disadvantage, however, is that the Retainer Agreement cannot be deemed binding on the estate or the Probate Court since the estate is not a party to such contract. This would not preclude the Probate Court from enforcing the provisions of the Retainer Agreement if, in its sound discretion, the terms of payment therein are commensurate to the value of the actual services necessary to the administration of the estate actually rendered by petitioner. Yet if the Probate Court does choose to adopt the Retainer Agreement as binding on the estate of Doña Adela, petitioner may again be precluded from immediate recovery of attorney's fees in view of the necessity or precondition of ascertaining the gross total value of the estate, as well as the judicial approval of the final agreement of partition.

In any event, whether the claim for attorney's fees was pursued through a separate suit against Olivia Pascual (in her personal capacity) for the enforcement of the Retainer Agreement, or against the estate of Doña Adela as reimbursement for necessary administration expenses, it remains essential that a hearing be conducted on the claim. In either case too, the hearing will focus on the value of the services of the petitioner and the necessity of engaging petitioner as counsel.

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.

Hence, 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.

One final note. Petitioner's final prayer before this court is that it be issued a partial writ of execution, consistent with its position before the Probate Court that it is already entitled to at least a partial payment of its attorney's fees. This prayer cannot obviously be granted at this stage by the Court, considering the fatal absence of due notice to the other designated beneficiaries to the estate of Doña Adela. Still, we do not doubt that the Probate Court, within its discretion, is capacitated to render the award of attorney's fees as administration expenses either partially or provisionally, depending on the particular circumstances and its ultimate basis for the determination of the appropriate attorney's fees.

WHEREFORE, the petition is GRANTED IN PART. The Decision of the Court of Appeals dated 22 December 1995 and the Orders of the Regional Trial Court of Malabon, Branch 72, dated 2 June 1994 and 17 March 1995 are hereby SET ASIDE insofar as said orders denied petitioner's Motion for Writ of Immediate Execution dated 26 April 1994. Petitioner is hereby directed to set for hearing its claim for attorneys fees, giving due notice thereof to all the heirs, devisees, and legatees designated in the 1978 Last Will and Testament executed by Doña Adela Pascual. The Regional Trial Court is directed to treat petitioner's aforesaid motion as a PETITION for the payment of attorney's fees as expenses of administration, and after due hearing resolve the same with DISPATCH, conformably with this decision. No pronouncement as to costs.

SO ORDERED.

Estate of Olave vs. Reyes, supra

Short Summary: Administrators of estate of decedent entered into an amicable settlement with a creditor company who wanted to collect from the estate of the decedent in a separate proceeding. This was done w/o prior approval of the probate court. SC held that prior approval of the probate court needed because (1) the claim of the creditors is a claim against the estate; and (2) probate court already acquired exclusive jurisdiction over the case, to the exclusion of the other court)

Facts

-there's already a special proceeding for the settlement of the estate of Amadeo Matute Olave in the Manila court. There's an order from this court providing that the co-administrators should first secure the probate court's approval before entering into any transaction involving the 17 titles of the estate

-Southwest Agricultural Marketing Corporation (SAMCO) filed Civil case for collection of debt and attorney's fees in Davao court against the co-administrators of the estate of Amadeo Olave

-even after order from the probate court to secure first its approval, SAMCO and the co-administrators entered into an AMICABLE SETTLEMENT wherein one of the 17 titles of the estate was ceded to SAMCO as payment for its claim. This was done w/o notice and approval of the probate court

-DAVAO COURT: approved amicable settlement

WON SAMCO PROPERLY FILED CLAIM IN A SEPARATE PROCEEDING? NO

R87.1: "no action upon a claim for the recovery of money or debt or interest thereon shall be commenced against the executor or administrator; . . ."

Claim of Samco could only be pursued by filing it in the administration proceedings and w/n the prescribed period, or else barred forever

Why present claims in the probate court: 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 shall share pro-rata in the liquidation of the estate of the deceased.

Manila Probate court already has exclusive jurisdiction over the proceeding and the properties claimed: R73.1

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.

Santos vs. Manarang

G.R. No. L-8235 March 19, 1914

ISIDRO SANTOS, Plaintiff-Appellant,

vs.

LEANDRA MANARANG, administratrix, Defendant-Appellee.

TRENT, J.: .

Don Lucas de Ocampo died on November 18, 1906, possessed of certain real and personal property which, by his last will and testament dated July 26, 1906, he left to his three children. The fourth clause of this will reads as follows:

I also declare that I have contracted the debts detailed below, and it is my desire that they may be religiously paid by my wife and executors in the form and at the time agreed upon with my creditors.

Among the debts mentioned in the list referred to are two in favor of the plaintiff, Isidro Santos; one due on April 14, 1907, for P5,000, and various other described as falling due at different dates (the dates are not given) amounting to the sum of P2,454. The will was duly probated and a committee was regularly appointed to hear and determine such claims against the estate as might be presented. This committee submitted its report to the court on June 27, 1908. On July 14, 1908, the plaintiff, Isidro Santos, presented a petition to the court asking that the committee be required to reconvene and pass upon his claims against the estate which were recognized in the will of testator. This petition was denied by the court, and on November 21, 1910, the plaintiff instituted the present proceedings against the administratrix of the estate to recover the sums mentioned in the will as due him. Relief was denied in the court below, and now appeals to this court.. .

In his first assignment of error, the appellant takes exception to the action of the court in denying his petition asking that the committee be reconvened to consider his claim. In support of this alleged error counsel say that it does not appear in the committee's report that the publications required by section 687 of the Code of Civil Procedure had been duly made. With reference to this point the record affirmatively shows that the committee did make the publications required by law. It is further alleged that at the time the appellant presented his petition the court had not approved the report of the committee. If this were necessary we might say that, although the record does not contain a formal approval of the committee's report, such approval must undoubtedly have been made, as will appear from an inspection of the various orders of the court approving the annual accounts of the administratrix, in which claims allowed against the estate by the committee were written off in accordance with its report. This is shown very clearly from the court's order of August 1, 1912, in which the account of the administratrix was approved after reducing final payments of some of the claims against the estate to agree with the amounts allowed by the committee. It is further alleged that at the time this petition was presented the administration proceedings had not been terminated. This is correct.. .

In his petition of July 14, 1909, asking that the committee be reconvened to consider his claims, plaintiff states that his failure to present the said claims to the committee was due to his belief that it was unnecessary to do so because of the fact that the testator, in his will, expressly recognized them and directed that they should be paid. The inference is that had plaintiff's claims not been mentioned in the will he would have presented to the committee as a matter of course; that plaintiff was held to believe by this express mention of his claims in the will that it would be unnecessary to present them to the committee; and that he did not become aware of the necessity of presenting them to the committee until after the committee had made its final report.. .

Under these facts and circumstances, did the court err in refusing to reconvene the committee for the purpose of considering plaintiff's claim? The first step towards the solution of this question is to determine whether plaintiff's claims were such as a committee appointed to hear claims against an estate is, by law, authorized to pass upon. Unless it was such a claim plaintiff's argument has no foundation. Section 686 empowers the committee to try and decide claims which survive against the executors and administrators, even though they be demandable at a future day "except claims for the possession of or title to real estate." Section 700 provides that all actions commenced against the deceased person for the recovery of money, debt, or damages, pending at the time the committee is appointed, shall be discontinued, and the claims embraced within such actions presented to the committee. Section 703 provides that actions to recover title or possession of real property, actions to recover damages for injury to person or property, real and personal, and actions to recover the possession of specified articles of personal property, shall survive, and may be commenced and prosecuted against the executor or administrator; "but all other actions commenced against the deceased before his death shall be discontinued and the claims therein involved presented before the committee as herein provided." Section 708 provides that a claim secured by a mortgage or other collateral security may be abandoned and the claim prosecuted before the committee, or the mortgage may be foreclosed or the security be relied upon, and in the event of a deficiency judgment, the creditor may, after the sale of mortgage or upon the insufficiency of the security, prove such deficiency before the committee on claims. There are also certain provisions in section 746 et seq., with reference to the presentation of contingent claims to the committee after the expiration of the time allowed for the presentation of claims not contingent. Do plaintiff's claims fall within any of these sections? They are described in the will as debts. There is nothing in the will to indicate that any or all of them are contingent claims, claims for the possession of or title to real property, damages for injury to person or property, real or personal, or for the possession of specified articles of personal property. Nor is it asserted by the plaintiff that they do. The conclusion is that they were claims proper to be considered by the committee.. .

This being true, the next point to determine is, when and under what circumstances may the committee be recalled to consider belated claims? Section 689 provides:

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

It cannot be questioned that thus section supersedes the ordinary limitation of actions provided for in chapter 3 of the Code. It is strictly confined, in its application, to claims against the estate of deceased persons, and has been almost universally adopted as part of the probate law of the United States. It is commonly termed the statute of nonclaims, and its purpose is to settle the affairs of the estate with dispatch, so that residue may be delivered to the persons entitled thereto without their being afterwards called upon to respond in actions for claims, which, under the ordinary statute of limitations, have not yet prescribed.

The object of the law in fixing a definite period within which claims must be presented is to insure the speedy settling of the affairs of a deceased person and the early delivery of the property of the estate in the hands of the persons entitled to receive it. (Estate of De Dios, 24 Phil. Rep., 573.)

Due possibly to the comparative shortness of the period of limitation applying to such claims as compared with the ordinary statute of limitations, the statute of nonclaims has not the finality of the ordinary statute of limitations. It may be safely said that a saving provision, more or less liberal, is annexed to the statute of nonclaims in every jurisdiction where is found. In this country its saving clause is found in section 690, which reads as follows:

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

If the committee fails to give the notice required, that is a sufficient cause for reconvening it for further consideration of claims which may not have been presented before its final report was submitted to the court. But, as stated above, this is not the case made by the plaintiff, as the committee did give the notice required by law. Where the proper notice has been given the right to have the committee recalled for the consideration of a belated claim appears to rest first upon the condition that it is presented within six months after the time previously limited for the presentation of claims. In the present case the time previously limited was six months from July 23, 1907. This allowed the plaintiff until January 23, 1908, to present his claims to the committee. An extension of this time under section 690 rested in the discretion of the court. (Estate of De Dios, supra.) In other words, the court could extend this time and recall the committee for a consideration of the plaintiff's claims against the estate of justice required it, at any time within the six months after January 23, 1908, or until July 23, 1908. Plaintiff's petition was not presented until July 14, 1909. The bar of the statute of nonclaims is an conclusive under these circumstances as the bar of the ordinary statute of limitations would be. It is generally held that claims are not barred as to property not included in the inventory. (Waughop vs. Bartlett, 165 III., 124; Estate of Reyes, 17 Phil. Rep., 188.) So also, as indicated by this court in the case last cited, fraud would undoubtedly have the same effect. These exceptions to the operation of the statute are, of course, founded upon the highest principles of equity. But what is the plea of the plaintiff in this case? Simply this: That he was laboring under a mistake of law - a mistake which could easily have been corrected had he sought to inform himself; a lack of information as to the law governing the allowance of claims against estate of the deceased persons which, by proper diligence, could have been remedied in ample to present the claims to the committee. Plaintiff finally discovered his mistake and now seeks to assert his right when they have been lost through his own negligence. Ignorantia legis neminem excusat. We conclude that the learned trial court made no error in refusing to reconvene the committee for the purpose of considering plaintiff's claims against the estate.. .

In his second assignment of error the appellant insists that the court erred in dismissing his petition filed on November 21, 1910, wherein he asks that the administratrix be compelled to pay over to him the amounts mentioned in the will as debts due him. We concede all that is implied in the maxim, dicat testor et erit lex. But the law imposes certain restrictions upon the testator, not only as to the disposition of his estate, but also as to the manner in which he may make such disposition. As stated in Rood on Wills, sec. 412: "Some general rules have been irrevocably established by the policy of the law, which cannot be exceeded or transgressed by any intention of the testator, be it ever so clearly expressed." .

It may be safely asserted that no respectable authority can be found which holds that the will of the testator may override positive provisions of law and imperative requirements of public policy. (Page on Wills, sec. 461.)

Impossible conditions and those contrary to law and good morals shall be considered as not imposed, . . . (Art. 792, Civil Code.)

Conceding for the moment that it was the testator's desire in the present case that the debts listed by him in his will should be paid without referring them to a committee appointed by the court, can such a provision be enforced? May the provisions of the Code of Civil Procedure relating to the settlement of claims against an estate by a committee appointed by the court be superseded by the contents of a will? .

It is evident from the brief outline of the sections referred to above that the Code of Civil Procedure has established a system for the allowance of claims against the estates of decedents. Those are at least two restrictions imposed by law upon the power of the testator to dispose of his property, and which pro tanto restrict the maxim that "the will of the testator law: (1) His estate is liable for all legal obligations incurred by him; and (2) he can not dispose of or encumber the legal portion due his heirs by force of law. The former take precedence over the latter. (Sec. 640, Code Civ, Proc.) In case his estate is sufficient they must be paid. (Sec, 734, id.) In case the estate is insolvent they must be paid in the order named in section 735. It is hardly necessary to say that a provision in an insolvent's will that a certain debt be paid would not entitle it to preference over other debts. But, if the express mention of a debt in the will requires the administrator to pay it without reference to the committee, what assurance is there, in the case of an insolvent estate, that it will not take precedence over preferred debts? .

If it is unnecessary to present such claim to the committee, the source of nonclaims is not applicable. It is not barred until from four to ten years, according to its classification in chapter 3 of the Code of Civil Procedure, establishing questions upon actions. Under such circumstances, when then the legal portion is determined? If, in the meantime the estate has been distributed, what security have the differences against the interruption of their possession? Is the administrator required to pay the amount stipulated in the will regardless of its correctness? And, if not, what authority has he to vise the claim? Section 706 of the Code of Civil Procedure provides that an executor may, with the approval of the court, compound with a debtor of deceased for a debt due the estate, But he is nowhere permitted or directed to deal with a creditor of the estate. On the contrary, he is the advocate of the estate before an impartial committee with quasi-judicial power to determine the amount of the claims against the estate, and, in certain cases, to equitably adjust the amounts due. The administrator, representing the debtor estate, and the creditor appear before this body as parties litigant and, if either is dissatisfied with its decision, an appeal to the court is their remedy. To allow the administrator to examine and approve a claim against the estate would put him in the dual role of a claimant and a judge. The law in this jurisdiction has been so framed that this may not occur. The most important restriction, in this jurisdiction, on the disposition of property by will are those provisions of the Civil Code providing for the preservation of the legal portions due to heirs by force of law, and expressly recognized and continued in force by sections 614, 684, and 753 of the Code of Civil Procedure. But if a debt is expressly recognized in the will must be paid without its being verified, there is nothing to prevent a partial or total alienation of the legal portion by means of a bequest under a guise of a debt, since all of the latter must be paid before the amount of the legal portion can be determined.. .

We are aware that in some jurisdictions executors and administrators are, by law, obligated to perform the duties which, in this jurisdiction, are assign to the committee on claims; that in some other jurisdictions it is the probate court itself that performs these duties; that in some jurisdictions the limitation upon the presentment of claims for allowance is longer and, possibly, in some shorter; and that there is a great divergence in the classification of actions which survive and actions which do not survive the death of the testator. It must be further remembered that there are but few of the United States which provide for heirs by force of law. These differences render useless as authorities in this jurisdiction many of the cases coming from the United States. The restriction imposed upon the testator's power to dispose of his property when they are heirs by force of law is especially important. The rights of these heirs by force law pass immediately upon the death of the testator. (Art. 657, Civil Code.) The state intervenes and guarantees their rights by many stringent provisions of law to the extent mentioned in article 818 of the Civil Code. Having undertaken the responsibility to deliver the legal portion of the net assets of the estate to the heirs by force of law, it is idle to talk of substituting for the procedure provided by law for determining the legal portion, some other procedure provided in the will of the testator. The state cannot afford to allow the performance of its obligations to be directed by the will of an individual. There is but one instance in which the settlement of the estate according to the probate procedure provided in the Code of Civil Procedure may be dispense with, and it applies only to intestate estates. (Sec. 596, Code Civ. Proc.) A partial exemption from the lawful procedure is also contained in section 644, when the executor or administrator is the sole residuary legatee. Even in such case, and although the testator directs that no bond be given, the executor is required to give a bond for the payment of the debts of the testator. The facts of the present case do not bring it within either of this sections. We conclude that the claims against the estate in the case at bar were enforceable only when the prescribed legal procedure was followed.. .

But we are not disposed to rest our conclusion upon this phase of the case entirely upon legal grounds. On the contrary we are strongly of the opinion that the application of the maxim, "The will of the testator is the law of the case," but strengthens our position so far as the present case is concerned.

It will ordinarily be presumed in construing a will that the testator is acquainted with the rules of law, and that he intended to comply with them accordingly. If two constructions of a will or a part thereof are possible, and one of these constructions is consistent with the law, and the other is inconsistent, the presumption that the testator intended to comply with the law will compel that construction which is consistent with the law to be adopted. (Page on Wills, sec. 465.)

Aside from this legal presumption, which we believe should apply in the present case as against any construction of the will tending to show an intention of the testator that the ordinary legal method of probating claims should be dispensed with, it must be remembered that the testator knows that the execution of his will in no way affects his control over his property. The dates of his will and of his death may be separated by a period of time more or less appreciable. In the meantime, as the testator well knows, he may acquire or dispose of property, pay or assume additional debts, etc. In the absence of anything to the contrary, it is only proper to presume that the testator, in his will, is treating of his estate at the time and in the condition it is in at his death. Especially is this true of his debts. Debts may accrue and be paid in whole or in part between the time the will is made and the death of the testator. To allow a debt mentioned in the will in the amount expressed therein on the ground that such was the desire of the testator, when, in fact, the debt had been wholly or partly paid, would be not only unjust to the residuary heirs, but a reflection upon the good sense of the testator himself. Take the present case for example. It would be absurd to say that the testator knew what the amount of his just debt would be at a future and uncertain date. A mere comparison of the list of the creditors of the testator and the amounts due them as described in his will, with the same list and amounts allowed by the committee on claims, shows that the testator had creditors at the time of his death not mention in the will at all. In other instances the amounts due this creditors were either greater or less than the amounts mentioned as due them in the will. In fact, of those debts listed in the will, not a single one was allowed by the committee in the amount named in the will. This show that the testator either failed to list in his will all his creditors and that, as to those he did include, he set down an erroneous amount opposite their names; or else, which is the only reasonable view of the matter, he overlooked some debts or contracted new ones after the will was made and that as to others he did include he made a partial payments on some and incurred additional indebtedness as to others.

While the testator expresses the desire that his debts be paid, he also expressly leaves the residue of his estate, in equal parts, to his children. Is it to be presumed that he desired to overpay some of his creditors notwithstanding his express instructions that his own children should enjoy the net assets of his estate after the debts were paid? Again, is the net statement of the amount due some of his creditors and the omission all together of some of his creditors compatible with his honorable and commendable desire, so clearly expressed in his will, that all his debts be punctually paid? We cannot conceive that such conflicting ideas were present in the testator's mind when he made his will.. .

Again, suppose the testator erroneously charged himself with a debt which he was under no legal or even moral obligation to pay. The present case suggests, if it does not actually present, such a state of affairs. Among the assets of the estate mentioned in the will is a parcel of land valued at P6,500; while in the inventory of the administratrix the right to repurchase this land from one Isidro Santos is listed as an asset. Counsel for the administratrix alleges that he is prepared to prove that this is the identical plaintiff in the case at bar; that the testator erroneously claimed the fee of this land in his last will and stated Santos' rights in the same as a mere debt due him of P5,000; that in reality, the only asset of the testator regard to this land was the value of the right to repurchase, while the ownership of the land, subject only to that right of redemption, belonged to Santos; that the right to repurchase this land expired in 1907, after the testator's death. Assuming, without in the least asserting, that such are the underlying facts of this case, the unjust consequences of holding that a debt expressly mentioned in the will may be recovered without being presented to the committee on claims, is at once apparent. In this supposed case, plaintiff needed only wait until the time for redemption of the land had expired, when he would acquired an absolute title to the land, and could also have exacted the redemption price. Upon such a state of facts, the one item of P5,000 would be a mere fictitious debt, and as the total net value of the estate was less than P15,000, the legal portion of the testator's children would be consumed in part in the payment of this item. Such a case cannot occur if the prescribed procedure is followed of requiring of such claims be viseed by the committee on claims.

The direction in the will for the executor to pay all just debts does not mean that he shall pay them without probate. There is nothing in the will to indicate that the testator in tended that his estate should be administered in any other than the regular way under the statute, which requires "all demands against the estates of the deceased persons," "all such demands as may be exhibited," etc. The statute provides the very means for ascertaining whether the claims against the estate or just debts. (Kaufman vs. Redwine, 97 Ark., 546.)

See also Collamore vs. Wilder (19 Kan., 67); O'Neil vs. Freeman (45 N. J. L., 208).. .

The petition of the plaintiff filed on November 21, 1910, wherein he asks that the administratrix be compelled to pay over to him the amounts mentioned in the will as debts due him appears to be nothing more nor less than a complaint instituting an action against the administratrix for the recovery of the sum of money. Obviously, the plaintiff is not seeking possession of or title to real property or specific articles of personal property.

When a committee is appointed as herein provided, no action or suit shall be commenced or prosecute against the executor or administrator upon a claim against the estate to recover a debt due from the state; but actions to recover the seizing and possession of real estate and personal chattels claimed by the estate may be commenced against him. (Sec. 699, Code Civ. Proc.)

The sum of money prayed for in the complaint must be due the plaintiff either as a debt of a legacy. If it is a debt, the action was erroneously instituted against the administratrix. Is it a legacy? .

Plaintiff's argument at this point becomes obviously inconsistent. Under his first assignment of error he alleges that the committee on claims should have been reconvened to pass upon his claim against the estate. It is clear that this committee has nothing to do with legacies. It is true that a debt may be left as a legacy, either to the debtor (in which case it virtually amounts to a release), or to a third person. But this case can only arise when the debt is an asset of the estate. It would be absurd to speak of a testator's leaving a bare legacy of his own debt. (Arts. 866, 878, Civil Code.) The creation of a legacy depends upon the will of the testator, is an act of pure beneficence, has no binding force until his death, and may be avoided in whole or in part by the mere with whim of the testator, prior to that time. A debt arises from an obligation recognized by law (art. 1089, Civil Code) and once established, can only be extinguished in a lawful manner. (Art. 1156, id.) Debts are demandable and must be paid in legal tender. Legacies may, and often do, consist of specific articles of personal property and must be satisfied accordingly. In order to collect as legacy the sum mentioned in the will as due him, the plaintiff must show that it is in fact a legacy and not a debt. As he has already attempted to show that this sum represents a debt, it is an anomaly to urge now it is a legacy.. .

Was it the intention of the testator to leave the plaintiff a legacy of P7,454? We have already touched upon this question. Plaintiff's claim is described by the testator as a debt. It must be presumed that he used this expression in its ordinary and common acceptation; that is, a legal liability existing in favor of the plaintiff at the time the will was made, and demandable and payable in legal tender. Had the testator desired to leave a legacy to the plaintiff, he would have done so in appropriate language instead of including it in a statement of what he owed the plaintiff. The decedent's purpose in listing his debts in his will is set forth in the fourth clause of the will, quoted above. There is nothing contained in that clause which indicates, even remotely, a desire to pay his creditors more than was legally due them.

A construction leading to a legal, just and sensible result is presumed to be correct, as against one leading to an illegal, unnatural, or absurd effect. (Rood on Wills, sec. 426.)

The testator, in so many words, left the total net assets of his estate, without reservation of any kind, to his children per capita. There is no indication that he desired to leave anything by way of legacy to any other person. These considerations clearly refute the suggestion that the testator intended to leave plaintiff any thing by way of legacy. His claim against the estate having been a simple debt, the present action was improperly instituted against the administratrix. (Sec. 699, Code Civ. Proc.) .

But it is said that the plaintiff's claims should be considered as partaking of the nature of a legacy and disposed of accordingly. If this be perfect then the plaintiff would receive nothing until after all debts had been paid and the heirs by force of law had received their shares. From any point of view the inevitable result is that there must be a hearing sometime before some tribunal to determine the correctness of the debts recognized in the wills of deceased persons. This hearing, in the first instance, can not be had before the court because the law does not authorize it. Such debtors must present their claims to the committee, otherwise their claims will be forever barred.. .

For the foregoing reasons the orders appealed from are affirmed, with costs against the appellant.. .

Torres, Carson and Araullo, JJ., concur.

Separate Opinions 

MORELAND, J., dissenting: .

The decision of the court in this case produces, in my humble opinion, a serious miscarriage of justice. It causes the appellant to lose more than P7,000, a debt against the respondent estate, which debt, but a few months before his death, was specifically recognized by the testator in his will as a debt due and owing to petitioner and which he, in said will, ordered and directed his executor to pay "religiously." .

If I could find justification for such a decision either in the proceedings as they are unfolded by the record or in the law as laid down in the Code of Civil Procedure, I would, of course, acquiesce. Far from finding such justification, I am met so far as my judgment can discern, with facts of record which demonstrate conclusively that the decision is erroneous in fact.. .

The opinion seeks to demonstrate that a creditor, whose claim is recognized by the highest possible authority, the debtor himself, in the most solemn instrument known to the law, his last will and testament, as legal, just and valid, must lose that claim because the validity thereof has not been established by the committee. And this inspite of the fact that, upon the record of the case, no one interested in the estate disputes the claim or challengers its validity. Take this proposition in connection with the fact that the committee to hear claims had not been discharged, that the estate has not been finally closed but is still pending settlement, and that, therefore, there exist not a single reason, in equity or justice, why the claimant should not be permitted to present his claim, if that is necessary, and we have before us a situation which indicates how far the decision has gone.. .

It should be carefully observed that the petitioner Isidro Santos, was defeated in this litigation upon the ground, and the sole ground, that he did not present his claim to the committee, in pursuance of a notice to creditors published under an order datedJuly 23, 1907, and that he, therefore, lost the right to enforce the claim; that the notice having been published from July 25, 1907, to August 16, 1907, petitioner's application on July 14, 1909, for the extension of time for the presentation of claims to the old committee or the appointment of a new committee for that purpose, was too late and was properly denied, and that his motion made November 21, 1909, praying that the executor be compelled to carry out the wishes of the testator and pay the claim, was also properly denied.. .

In my judgment the decision is erroneous from whatever point viewed: .

1. Even if it be assumed that the notice to creditors should have been published in accordance with the order of July 23, 1907, the record is entirely lacking in legal evidence to establish the publication which the law requires under that order. That being so the claim is not barred.. .

2. I contend, and the record shows, that the notice should not have been published in accordance with the order of July 23, 1907, but in pursuance of an order of January 8, 1908, which was an order for a new publication, and, being later order, necessarily vacated and annulled the order of July 23, 1907, and all proceedings thereunder relative to the matters included in said order of January 8, 1908; that publication was concededly never made under and in pursuance of that order and that, for that reason, the petitioner's claim is not barred.. .

3. The claim was not one that must be submitted to a committee, being recognized as a legal and valid debt by the will and the testator having ordered his executor to pay it. The motion made to require the executor to pay the claim should have been heard by the court.. .

The facts of this case, as shown by the record, are: .

Don Lucas de Ocampo made a will July 26, 1906. He died November 18, 1906. The will specifically named Isidoro Santos, the petitioner, a creditor of the testator, set out the specific amount due him, named an executor, and directed him to pay the claim "religiously." .

The will was probated July 15, 1907, and Leandra Manarang, the widow, appointed temporary administratrix. Her administration was terminated on July 23, 1907, and Cosme Naval, the person named in the will as executor, was, on that date, duly appointed executor. On the same day Pedro Abad Santos and Marcos Tancuaco were named the committee of appraisal and to her claims presented against the estate, the court making the following order:

There having been heard the petition presented by Señor Cosme Naval, praying that he be appointed executor of the above named estate as provided in the will of the deceased Lucas de Ocampo; and also praying the appointment of a committee of appraisal consisting of Señores Pedro Abad Santos and Marcos Tancuaco: .

It is ordered that the said Cosme Naval may be and he hereby is appointed executor of the will of Lucas de Ocampo, deceased, the clerk being authorized to issue in favor of said Cosme Naval letters testamentary, the petitioner being first required to take the oath prescribed by law and to file a bond in the sum of P500 Philippine currency, with two sureties satisfactory to the court.. .

It is also ordered that the special letters of administration issued temporarily in favor of the widow of the deceased, Leandra Manarang, remain without effect from this day.. .

It is further ordered that Señores Pedro Abad Santos and Marcos Tancuaco be and they hereby appointed the committee of appraisal and claims of this estate.

On the 28th of September, 1907, Naval was removed from office and Leandra Manarang named in his place. On December 3, same year, Pedro Abad Santos resigned from the committee to become the attorney for the estate and Donato Iturralde was appointed in his stead.. .

Following these changes both in the office of executor and in that of the committee, on January 8, 1908, the court made an order which, in itself, is, in my judgment, a complete refutation of the decision in this case and demonstrates that a contrary judgment should have been rendered. That order, dated, as I have said, on January 8, 1908, and promulgated on that day, reads as follows:

Whereas, the Hon. Julio Llorente, in decree dated December 3, 1907, appointed Señor Donato Iturralde, a resident of this city, to the office of committee of appraisal in the above-entitled proceeding: .

Therefore, and in compliance with the above-mentioned decree, Señor Donato Iturralde, a resident of this city, is appointed a member of the committee of appraisal and to hear the claims that may be presented against the property of this estate, which committee within thirty days from the date of said decree shall deliver a copy of the inventory to this court and another to the administratrix Señora Leandra Manarang, and within sixty days shall post a notice at the main door of this courthouse and in three public places in the municipality where the property of the said deceased is located, in which shall be stated the dates and places when and where the meetings of the committee will be held and notifying that creditors that they should present their claims within six months counting from the date of said notice; said notice, furthermore, to be published during three consecutive weeks in the newspaper "El Imparcial," having general circulation in this province.. .

Given to-day, the 8th of January, 1908, by order of the Hon. Julio Llorente, Judge of the Fourth Judicial District and of this Province of Pampanga.

On July 14, 1908, the committee filed a report, the only report in the record, in which appears the following statement:

The undersigned, committee of appraisal and claims against the above estate, presents a to the court the following list of all claims presented against the said estate since the 25th day of July, 1907, in which date the first publication to creditors was made.

The publication under which committee was reporting was begun under the order of July 23, 1907, which was vacated and annulled by the order of January 8, 1908, which, by reason of the changes in the offices of executor and committee, ordered a new and different notice to the creditors.. .

On July 14, 1909, petitioner herein made an application to the court to reopen the sessions of the committee and permit him to present the claim mentioned in the will. This was denied November 27, 1909, the court simply saying:

This cause having been heard and the parties having presented their arguments, the motion is denied by reason of the lapse of time.

On November 21, 1910, the petitioner moved the court that, the testator having recognized and legalized the debt in his will and having ordered his executor to pay the same to the petitioner, said executor be ordered and directed to pay said claim to the petitioner pursuant to the testator's directions. This motion was denied April 26, 1911, upon the same ground as the other motion.. .

The appeal is from both of these orders and brings up so much of the record as is pertinent to these questions.. .

The court has held on this appeal: .

1. That the motion last mentioned is an action. The opinion says: "The petition of the plaintiff filed on November 21, 1910, . . . appears to be nothing more or less than a complaint instituting an action against the administratrix for the recovery of the sum of money." After discussing this phase of the case the court concludes: "His claim against the estate having been a simple debt, the present action was improperly instituted against the administratrix (sec. 699, Code of Civ. Proc.)." This is one of the grounds of the decision.. .

2. That the recognition of the debt in the will and the direction of the testator to pay the same have no significance in the law.. .

3. That, notwithstanding this recognition and direction, the claim should have been presented to the committee appointed to hear and determine claims against the estate.. .

4. That the claim was not presented to the committee.. .

5. That all of the formalities required by law relative to the notice to the creditors t present their claims were fully observed, the court saying that "the record affirmatively shows that the committee did make the publications required by law." .

6. That the court below did not err in denying the motion to extend the time of the old committee or appoint a new one to the end that the claim in question might be presented.. .

7. That the court did not err in denying the motion to compel the executor to pay the claim in pursuance of the direction contained in the will.. .

Laying aside for a moment those holdings of the court which declare that the claim is one which must be presented to and passed upon by a committee. I am compelled to differ from every other propositions and statement of fact appearing in the decision pertinent to the issue involved, except the single one that the claim was not presented to a committee. That it was not presented is conceded; indeed, that fact that it was not is the whole cause of this proceeding.. 

I am compelled to believe that the statement of the decision that "the record affirmatively shows that the committee did make the publications required by law," is not quite in accordance with the record as I read it.. .

The opinion does not refer me to any evidence of record which supports its statement. Where is this evidence, where is this record which "affirmatively shows?" I have been unable to find it. Here is all the evidence, if it may be called evidence, which I am able to find it in the record relative to the publication of the notices to the creditors: .

(a) An affidavit of the publisher of "El Imparcial" setting out that the notice to creditors attached to the affidavit and signed byPedro Abad Santos (who before the completion of the publication, resigned) and Marcos Tancuaco, dated July 23, 1907, was published "three weeks from the 25th of July to the 16th of August, 1907." .

The notice referred to is as follows:

The undersigned committee of appraisal hereby notifies the creditors of Lucas de Ocampo, deceased, and all other persons who have claims against the estate of said deceased, to present the same with vouchers within six months from the date of this notice to the committee, every Monday, between 4 and 5 o'clock p. m., at the dwelling house of Pedro A. Santos, Sagasta Street, San Fernando, Pampanga. Dated San Fernando, Pampanga, P. I., July 23, 1907. Signed: Pedro Abad Santos, committee. Marcos Tancuaco, committee.

The defectiveness of the affidavit is apparent. It does not show whether the newspaper was daily, weekly, biweekly or monthly, or the day of the week or month on which published. It does not show that the notice was published three weeks successively, that is, once each week for three successive weeks, as required by law and the order of the court. So ambiguous is it that is might mean that the notice was published once, namely, three weeks from July 25. Passing, however, these defects, I note that the notice to creditors requires them to present their claims at the dwelling house of Pedro Abad Santos. It should be noted, as before stated, that this commissioner resigned before the expiration of the six months, thus making it necessary for creditors to present their claims and their proofs thereof to one who was not a member of the committee and to a man who, immediately on his resignation, became the attorney of the estate. This will become important when we later discuss the significance of the fact that the court, as already seen, on January 8, 1908, made a new order requiring that a new notice be given to creditors, to be published thereafter, thereby revoking the order of July 23, 1907, and annulling the notice to creditors above set out and then in course of publication.. .

(b) The remaining item of evidence which it is claimed tends to show that the notice to creditors was duly published is the reference made by the commissioners in their report to the court, above quoted, in which they say, referring to July 25, 19076, "on which date the first publication to creditors was made." .

This reference cannot be called evidence of publication, although the court accepts it as such. At most it refers and is limited, in terms, to the first publication. It has not the slightest reference to the other publications, if any.. .

This, (a) and (b), is all evidence in the whole record relative to the publication of the notice to creditors. Admitting it all to be true and giving it all weight possible, does it establish "affirmatively that the committee did make the publications required by law?" I am of the opinion not The law requires, in addition to the publication in the newspapers, that "the committee . . . shall post a notice in four public places in province stating the times and places of their meetings, and the time limited for creditors to present their claims . . . and give such other notice as the court directs.. .

Where is there in the record evidence showing that this was done? Nowhere. As I read the record, there is not a syllable of such evidence in all the case.. .

I, therefore, am forced to the conclusion that the declaration of the court that "the record affirmatively shows that the committee did make the publications required by law" is without sufficient evidence to support it.. 

After a thorough reading of the record, I am reluctantly forced to a further conclusion, namely, that instead of there being evidence in the case showing the publication required by law. there is evidence showing the precise contrary.. 

Let us remember that the first order of the court directing the committee to publish notice to creditors was issued July 23, 1907. It conceded that publication in a newspaper of some sort was started under that order. But, the court, evidently becoming satisfied that, under all the circumstances, the publication under that order would not be sufficient to give creditors fair notice, on January 8, 1908, and before the publication under the first order, if there was ever started in reality a publication under that order, was completed, made a second order of publication. The reason for this order was evidently that, during the six months succeeding the date of the notice which it is claimed was published under the first order, three persons held the office of executor, the complexion of the committee itself was changed, and the member of the committee at whose house the notice required the claims and vouchers to be presented resigned from the committee and became the attorney for the estate. Pedro Abad Santos having ceased to be a member of the committee and having become the attorney for the estate, and the notice to the creditors requiring that claims with their vouchers to be presented at his house, there was no longer a proper place designated where creditors could present their claims. Furthermore, the continual change in the executorship already noted may have resulted in grave prejudice to the estate if the estate were to be held responsible for all claims presented during the time those changes were taking place, it being the duty of the executor, under the law, to be present at the hearing on claims and defend the estate against those which deemed unjust, and the frequent change in the office, thereby bringing the persons unfamiliar with what had gone before, certainly not tending to efficiency.. .

All these facts, taken in connection with the defectiveness of the affidavit of the publication of the notice, and the fact that there was no posting of the notices as required by law, that the notice itself was defective in that it required the claims to be presented within six months from the date of the notice instead of the date of the last publication thereof, as the law, properly interpreted, requires, all these facts, I say, undoubtedly led the court to believe that the previous proceedings relative to claims should be annulled and that a new order of publication should be made. Accordingly, on January 8, 1908, as aforesaid, an order was made and entered as above set forth, requiring a new publication by a new committee. This order had the effect, of course, of vacating and annulling the previous order covering the same subject matter.. .

It is undisputed that no publication has ever been made or even attempted under this order of January 8, 1908. The only publication referred to in the record or in the opinion in this case is that under the order of July 23, 1907. No one contends that any other publication has ever been made or attempted.. .

That this order of January 8, 1908, was considered the governing order in the case and that it was an annullment of all prior proceedings and orders relative to the same subject matter, is clear. If notice had been given as provided by the order, the six months' term, according to the order, would have expired some time in July, 1908. This, of course, was clearly understood by the court, and we find the court, ever anxious to have the estate settled as quickly as possible under the law, making the following order on the 2d day of April, 1908:

It is hereby ordered that the administratrix present her inventory before the 1st day of May and the committee its reportwithin the time provided by law, and that the administratrix present her account before the 1st day of August, 1908.

This order demonstrates conclusively that the court believed that the committee was giving the notice to creditors as provided by order of January 8, 1908, and not that of July 23, 1907; for, if the notice was to be given under the latter and the publication began July 25, 1907, then the time within which the committee was to report expired in January, 1908 (see opinion), long before the order of April 2, 1908, was issued (Code Civ. Proc., sec. 693) and the requirement therein that the committee report "within the time provided by law" was idle. The court evidently believed that the notice was being published under the order of January 8, 1908, that the six months' period would expire in July, that the committee could therefore report to the administratrix the number and amounts of the claims presented and allowed, and that she could, therefore render her account before the 1st day of August, as in the order of April 2 required. This order is strictly inconsistent from every point of view with the idea that the order of July 23, 1907, was in force and that publication of the notice to creditors was proceeding thereunder.. .

I, therefore, say that the record demonstrates not only that the declaration of the court that "the record affirmatively shows that the committee did make the publications required by law" is without sufficient foundation in fact, but also that the contrary is true, namely, that no publication was ever made under the only order under which it could be legally made.. .

I contend, furthermore, that this proceeding is not an action against an executor to recover a debt against the estate of his testator. The decision of the court that it is an action and not being one of those which, under the Code, can be brought against an executor and must be dismissed for that reason is, in my judgment, erroneous. I do not understand how a motion to compel an executor to comply with the directions in a will can be called an action to recover a debt in a sense that such motion is prohibited by law.. .

Dealing with the second branch of the case, wherein the court holds that the debt should have been presented to a committee:.

The proposition that a debt which is recognized by the highest possible authority, the debtor himself, in then most solemn instrument known to the law and the one whose provisions are the most sacredly carried out by the courts, his last will and testament, which debt the testator, in his will, expressly ordered his executor to pay to the creditor by name, must be presented to the committee for them to determine whether it is a valid claim and whether it ought to be paid, is a proposition which appeals neither to my reason nor my sense of justice. There is no statute expressly requiring such presentation. There is none which by necessary implication requires it. To bring such a debt within the law requiring presentation to the committee, interpretation and construction must be invoked to such an extent as to shock if not violate the ordinary canons applicable thereto. This is particularly true when such interpretation and construction are resorted to deprive a creditor of a claim, the validity and justice of which is not only undisputed but unquestioned.. .

There is no provision of the Code of Civil Procedure expressly requiring the presentation of any claim to a committee. Provision is made for the appointment of a committee which is authorized to hear certain classes of claims but nowhere is there an express provision requiring a creditor to present his claim. There is, to be sure, a section which provides (sec. 695) that if the creditor fails to present his claim, if it is a certain kind of claim, within the time provided in the law, it will be barred. It is therefore, gathered by implication that every creditor having a certain kind of claim must present it; but there is no provision expresslyrequiring it. Moreover, it must be carefully noted that only certain claims need to be presented to the committee and that onlycertain claims are barred provided they are not exhibited. Section 686 confers upon the committee whatever jurisdiction it may have with respect to the hearing of claims, apart from those which actions were begun against decedent in his lifetime. It provides that "they may try and decide upon claims, which by law survive against executors or administrators, except claims for the possession of or title to real state;" and under section 695 only those claims are barred which are " proper to be allowed by the committee." .

We see then that the committee is authorized to take jurisdiction over those claims only which survive against an executor or administrator. The code does not define or declare "what claims survive against executor or administrators." It refers to certainactions which, having been commenced by the deceased in his lifetime, may be continued after his death by his executor or administrator. It nowhere tells us "what claims survive against executors or administrators, " or what claims are " proper to be allowed by the committee." We are unable to say, therefore, from the context of the Code itself what the authors thereof meant by the use of the phrases "claims which survive against executors or administrators" and which are "proper to be allowed by the committee." All that is clear is that it was the intention of the law to restrict the jurisdiction of the committee and keep it within certain limitations, and to that end used these limited expressions. It should be noted, however, that these limitations refer toclaims and have no reference to actions begun against the deceased before his death. The distinction made in the Code between claims and actions begun against the decedent during his lifetime, and the respective provisions referring to those two subjects, is entirely lost sight of in the decision of the court. This being so, the following reasoning found in the decision, based upon the failure to distinguish between claims and actions begun against the deceased in his lifetime, involves a conclusion in no sense related to the premises from which it is deduced:

Do plaintiff's claims fall within any of these sections? They are described in the will, as debts, There is nothing in the will to indicate that any or all of them are contingent claims, claims for the possession of or title to real property damages for injury to person or property, real or personal, or for the possession of specified articles of personal property. Nor is it asserted by the plaintiff that they do. The conclusion is that, they were claims proper to be considered by the committee.

That there is no necessary relation between those two subjects is apparent. That an action for "money, debt, or damages" begun against the decedent in his lifetime must, under section 710, be discontinued upon his death "and the claim embraced in such action may be presented to the committee, who shall allow the party prevailing the cost of such action to the time of its discontinuance," does not necessarily mean that such claim, if no action had been begun upon it, is one which must be exhibited to the committee. Whether an action begun against the decedent in his lifetime survives or does not survive, has no necessary relation with the necessity of presenting a claim to the committee. Would it be logical to argue that because an action begun against the deceased did not survive, the claim upon which it is based cannot, therefore, be presented to the committee, or that because in action begun against the deceased in his lifetime did survive, that, therefore, the claim upon which it was based could and must be presented to the committee? Assuredly not.. .

No general requirement that all claims must be presented to the committee appearing in the Code, and it affirmatively appearing that there was an intention to restrict the power of the committee in the hearing of claims, it necessarily follows that the conclusion reached by the court that all claims must be exhibited to the committee is pure inference and one but at all warranted by the provisions of the Code or by the rules of interpretation and construction, To me it is a conclusion absolutely necessary from the language of sections 686 and 695 that not all claims need to be exhibited. By express language these sections restrict the committee to the hearing of such claims as survive against executors or administrators and only those are barred which are proper to be presented to the committee.. .

The answer to the question, does not claim at bar survive against executors or administrators, brings us to an exposition of the various fundamental error made by the court in holding that the debt in question is one which must be presented to the committee. One of them is involved in the declaration that the debt in question is a claim within the meaning of the law. In cases such as this it is proper and necessary to make a distinction between a claim and a debt. A debt is a claim which has been favorably passed upon by the highest authority to which in can in law be submitted and has been declared to be a debt. A claim, on the other hand, is a debt in embryo. It is a mere evidence of a debt and must pass through the process prescribed by law before it develops into what is properly called a debt. The debt in the case at bar never was a claim. By the act of the testator himself, it was raised to the dignity of a debt and it remains such and must be acted upon as such by the courts as well as by all other. It was by the testator selected from the mass of his obligations, which are correctly called claims, and treated to a process which developed it into a thing called a "debt" over which no committee has jurisdiction and with the due course of which it has no authority to interfere.. .

The second fundamental error, following naturally from the first, is found in the declaration of the court that the debt in question is a claim which survives against the executors or administrator and must, therefore, be exhibit to the committee. This error involves, in my humble opinion, a misunderstanding of the nature of a will imposes upon all persons executing it. A will is the testator speaking after death. Its provisions have substantially the same force and effect in the probate court as if the testator stood before the court in full life making the declarations by word of mouth as they appear in the will. That was the special purpose of the law in the creation of the instrument known as the last will and testament. Men wished to speak after they were dead and the law, by the creation of that instrument, permitted them to do so. It is a upon this theory and around this purpose that there has grown that body of the law which uniformly and universally declares that the words of the testator spoken in his will shall be sacredly attended by his executor and enforced by the court. It has been declared a fundamental maxim, the first greatest rule, the sovereign guide, the polestar, in giving effect to the will, that the intention of the testator as expressed in the will shall be fully and punctually observed. If by the use of clear and certain, his will explains itself, and all that the court can do is to give it effect. All doubts must be resolved in favor of the testator's having meant just what he said. His purpose may seem unjust, unnatural or absurd to us; yet, to refuse to execute it is to destroy it. As Chief Justice Marshall said: "That intent of the testator is the cardinal rule in the construction of wills; and if that intent can be clearly perceived, and is not contrary to some positive rule of law, it must prevail." (3 Peters, 346.) .

The intention of the testator is said in the recent Virginia case to be "the life and soul of a will" and if this intention is clear it must be govern with absolute sway. A will is not like a promissory note or a judgment or any other instrument which acknowledges or incorporates an obligation. Those instruments are mere evidences of a debt. A will is not, primarily, evidence of anything; it is the thing itself. It is not so much the evidence of what the testator did or intended to do; it is then testator himself. The court has failed in this case to distinguish between a will and a promissory note, or a mortgage, so far as their legal effects are concerned, and the statement which I made early in this opinion, that the court has given no legal significance whatever to the fact that the instrument in which this debt was acknowledged and in which it was ordered paid was a last will and testament, is literally true. It has given the testamentary directions of the testator no more force, effect or significance than it gives to the words of a promissory note or a mortgage.. .

The third fundamental error which the decision has fallen is that it is misconceives the duties of an executor and of a court relative to the provisions of the will. It is, of course, axiomatic that is the duty of the executor, under the direction of the court, to carry out punctually and with the utmost care every provision of the will. That is why he is named "executor." He is an "executor" of a will because he "executes" the will. When he refuses or neglects to perform that function he ceases to be an executor and becomes a perverter or destroyer. Section 640 provides that the estate of the decedent shall be disposed of according to his will and the bond to be given by an executor, prescribed in section 643, must contain a clause in which the executor agrees, and his bondsmen assure, that he will administer "according to the will of the testator" the estate which comes into his hands.. .

Under the provisions of this will it is as much the duty of the executor to pay the debt here in litigation as it is to pay a legacy bequeathed by the will or to carry out a devise found therein. Of course, as we shall see later, if it appear to the executor that the debt in suit was paid, in whole or in part, as the case may be. In such case his refusal to pay will not be a refusal to carry out the will, but will be grounded in fact that the testator himself executed it prior to his demise. The proposition remains that the will must be executed; and the only excuse the executor can give for a refusal to execute it is that it has already been executed.. .

It is nowhere claimed in this case, and it cannot be, for no proceeding has reached far enough to involve the fact, that this debt has been paid, and nowhere in the record has its validity or binding force upon the estate been challenged or even disputed. That being the case, upon the facts, as they stand before us, there is no excuse which the executor of the court can now offer why the debt in suit has not been paid.. .

The fourth fundamental error into which the court has fallen in its decision is that it submits to the jurisdiction of a committee to hear claims the question of whether or not the provisions of the will are to be executed. This, although, it seems to me, is strange upon its face, is precisely what the court has, in effect, done in its decision; for, if a debt expressly acknowledged in the will and specifically ordered paid therein, must be submitted to a committee, it means that they may, in the excercise of their judgment, refuse its payment. This, in turn, means that the provision of the will in relation thereto is annulled. By this process the committee may, therefore, annul an express and mandatory provision of a will which is as binding as a provision giving legacy or making a devise. It is to the probate court, and to it alone, that the law confides the power to annul and set aside provisions in wills. The executor himself may not do so. And the court itself may do so only after the very clearest demonstration that the provision violates a positive provision of law or is against the public policy of the state. In spite of this, it is the decision of this court that a committee of two or more persons, none of whom is a lawyer, none of whom may be even a business man, all of whom may be ignorant and inexperienced, may sit in an informal way, and with all the imperfections inherent in such a tribunal and the practice which governs its deliberations, may revoke a mandatory provision in the most solemn instrument known to law. The bare statement of such a proposition is, it seems to me, its clearest refutation.. .

The fifth fundamental error into which the court has fallen follows naturally. As we have said, the decision give no significance to the fact that the debt at bar appears acknowledged and legalized in a last will and testament and that the testator therein solemnly ordered and directed his executor to pay it. Instead, the decision remands the creditor to the committee in exactly the same condition as any other creditor. He goes there with the burden of proof on him, with the necessity of establishing affirmatively and by a fair preponderance of the evidence the existence of the claim, the consideration therefore, and the fact that it has not been paid. There are laid upon him the restrictions and limitations imposed by section 383 of the Code of Civil Procedure, which stop his mouth as a witness under certain conditions. He is there with every burden, with every restriction upon him under which another creditors labors who has not a scrap of written evidence to support his claim. It is no adequate reply to say that he can put the will in evidence. He could do that with any other evidence that he might have. Moreover, that reply is a full admission of all that I have maintained, that the will is given no significance or value, as such, but is reduced to the mere function of being evidence to be passed upon by the committee. Furthermore, it is incumbent upon him to prove that the claim has not been paid and this is the very point which may be the thing most difficult to establish; and it is in relation to this that the restrictions and limitations imposed by the section referred to produce their greatest effect. This certainly cannot be law. It cannot be that the creditor whose debt is recognized as is the one at bar occupies a position no different from that of a creditor whose debt is not recognized. To contend the contrary, it seems to me, flies in the face not only of law and justice, but of common sense as well.. .

The fact that a debt is mentioned in the will as one not satisfied has, at least, the effect of changing the burden of proof from the creditor to the estate. Instead of the creditor being required to establish the validity of the claim and the fact of nonpayment, it is incumbent upon the estate to show payment affirmatively. At the very least, recognition by the testator in his will should be given that much significance. The court does not even concede this. The provision before us, while not a provision for a legacy, has nevertheless the same force and effect; and as a legatee is not bound to show affirmatively his right to the legacy and as it is the duty of the executor to seek out the legatee and pay him the legacy, so it is not the duty of the creditor in this case to show affirmatively his right to the payment of the debt, but it is the duty of the executor, knowing nothing to the contrary, to seek out the creditor and pay him as the testator has ordered him to do. If he knows anything to the contrary the burden is on him to demonstrate it.. .

These considerations naturally lead us to the point so strongly urged in the decision, and which I regard, for the purpose urged, without force, that the debt may have been paid between the time of the making of the will and the death of the testator; and that, therefore, it ought not to be paid by the executor until the question of payment is properly determined. No one is disputing that proposition. But its admission does not all mean that, to determine whether the claim has been paid or not, it must be presented to the committee. If it is the duty of the court, through the executor, to see if the will is conscientiously executed, what more natural, if not absolutely necessary, than to submit to the court whether the provision recognizing a debt ordering its payment should be carried out. What argument can be adduced, which does not fly squarely in the face of reason, to establish the proposition that a court has no business to determine whether a particular provision of a will shall be carried out or not,when its supreme duty is to require the punctual and precise execution of the whole will? How can it be maintained that, whether or not a particular provision in a will shall be carried out must be submitted not to the court, which has exclusive jurisdiction of the whole will, but to a committee of two or more ignorant and inexperienced persons? If it is the duty of the court to see that the will is executed as a whole, then there must go with that duty the power to determine whether a particular provision ordering the payment of a specific debt shall be executed or not. But the determination of this question is the determination of the question of payment. Why take from the court, which is the whole body that has the power to determine whether provisions in wills shall be carried out, the determination of whether a debt recognized in a particular provision has or has not been paid and turn it over to a committee such as I have described? .

It is thus seen that the proposition given so great weight in the decision, namely, that the debt should be submitted to the committee in order to determine whether it has bee paid, is without point or force. The court should make that determination far better than a committee. The practice leading to the determination by a court as to whether or not a given provision in a will shall be carried out is very simple, much simpler than is the proceeding before a committee. The executor finding that the will orders him to pay a certain debt and having no knowledge of his own that such debt has already been paid, presents his final account to the court, in which he asserts that he is going to pay the debt in accordance with the provision of the will. Notice is given to all parties interested in the estate. They appear. If they or any of them know of any reason why the provision of the will should not be carried out, they may manifest it. Upon that manifestation a hearing will be had and the court will determine whether or not the provision of the will has already been executed, in the whole or in part, and upon that determination he will rest a judgment in which he will order the executor to carry out the provision of the will by the payment of the debt or he will declare that the provision has already been carried out by payment. What simpler than this and what more conducive to justice? Who can say that the submission of the same question to a committee is better than the submission to a court? It might as well be urged that the legalization of the will, itself were better left to a committee than to a court; for, if whether or not the provisions of a will are to be carried out must be left to a committee, then whether it is a will at all or not may as well be left to the same authority.. .

The attempt of the court to meet the proposition that the will of the testator is the law of the case does not satisfy my judgment. It is claimed that the will of the testator is not the law of the case where it is in direct violation of a provision of law; and that the Court of Civil Procedure requiring that all claims shall be presented to the committee, the testator has no right to except a particular debt or any debt from the operation of the Code.. .

In the first place, the Code of Civil Procedure does not require that all claims shall be presented to the committee. It expressly limits the claims which must be exhibited. In the second place, the claim that there is anything contradictory between the will of the testator in this particular case and the provision of the Code of Civil Procedure is, in my judgment, rather fanciful than real. What is the purpose of requiring the exhibition of a claim to a committee? Simply to save the estate from being defrauded. There is absolutely no other reason which is behind the law requiring such a presentation. Is it claimed that a debtor may not pay a claim during his lifetime? If not, and the will is but a testator speaking after death, may he not pay a debt in that manner? If the man who is the estate solemnly acknowledges a debt and offers to pay it, who shall say that the estate is defrauded if the debt be paid? And if the estate is not defrauded, neither the spirit nor the letter of the law which has for its object the protection of the estate has been violated or evaded, but has, on the contrary, been fully observed.. .

I do not discuss or express an opinion relative to the proposition that the statute of nonclaims runs against a provision of a will, or suggests the results which may follow such doctrine.. .

The judgment should be reversed and the probate court ordered to hear petitioner's motion of the 21st of November and decide it upon the merits.