IN THE MATTER OF THE TESTATE ESTATE OF BASIL GORDON BUTLER, MERCEDES LEON, PETITIONER AND APPELLANT, AND ADA LOGGEY GHEZZI, ADMINISTRATRIX AND APPELLANT, VS. MANUFACTURERS LIFE …

This is an appeal from the Court of First
Instance of Manila which denied a motion of the administratrix in the
matter of the testate estate of Basil Gordon Butler (Special
Proceedings No. 6218). The motion prayed for the citation of the
Manager of the Manila Branch of the Manufacturers £ife Insurance Co. of
Toronto, Canada, to appear and render a complete accounting of certain
funds the said Branch allegedly has iri its possession and claimed to
belong to the estate. His Honor, Judge Rafael Amparo of the court
below, held that these funds “came into the possession of the
Manufacturers Life Insurance Co., Inc., regularly and in due course
and, therefore, sees no justifiable ground to require said company to
render an accounting thereon.”

The essential facts are that Basil Gordon Butler, formerly a
resident of the Philippines, died in Brooklyn, New York City, in 19^5»
leaving a will which was duly probated in the Surrogate’s Court of New
Tork County on August 3 of the same year, and of which James Ross, Sr.,
James Madison Ross, Jr. and Ewald E. Selph were named executors.
The estate having been settled, the proceedings were closed on July 17,
1947.

The will contained this residuary clause:

“After payment of these legacies and my just debts, including funeral
expenses, I devise, give and bequeath all of my remaining estate dad
personal effects of which I may die possessed to Mercedes de Leon, of
Maypajo, Caloocan, Rizal, to wits the personal effects to be delivered
to her for her use and profit? the moneys, securities and other
valuable property, not personal effects, to be held in trust for her
benefit by my executors, at their absolute discretion, to be
administered for her permanent benefit in whatever way they may
consider most advantageous in the circumstances existing. Since the
said Mercedes de Leon is not of sound judgment, and discretion in the
handling of money, it is not my wish that she be given any sums of
money other than for her current needs, except as my executors in their
judgment deem advantageous to her. In case the amount available for
this bequest be sufficient to purchase an adequate annuity, the
executors in their discretion may do so. And I attest and direct that I
do not wish to intend that the action of my executors upon their
discretion in this matter be questioned by anyone whatsoever.”

For
the purpose of carrying out that testamentary provision, James Madison
ross was appointed trustee by the New York Country Surrogate’s Court of
February 4, 1948. Once appointed, and with the beneficiary signing the
application with him, Ross bought an annuity from the Manufacturers
Life Insurance Co., at its head office in Toronto, Canada, paying in
advance $17,091.03 as the combined premiums. The contract stipulates
for a monthly payment of $57.60 to Mercedes de Leon during her
lifetime, with the proviso that in the event of her death, the residue,
if any, of the capital sum shall be paid in one sum to James Madison Ross or his successor as trustee. And beginning May 27, 1948, Mercedes
de Leon has been receiving the stipulated monthly allowance through the
Insurance Company’s Manila Office.

With the object, so it
would seem, of getting hold at once of the entire amount invested in
the annuity, Mercedes de Leon on September 4, 1948, presented Butler’s
will for probate in the court of First Instance of Manila, and secured
the appointment of Ada Loggey Ghezzi as administratrix with the will
annexed early in 1949. (James Madison Ross and Ewald E. Selph had
expressly declined appointment as executors “on the ground that the
probate proceedings of the above estate were terminated by the
Surrogate’s Court of the Country of New York, New York City, U. S. A.,
and that there are no properties of the estate left to be
administered.” After having qualified, the administratrix filed the motion
which Judge Amparo has denied; and as the party most if not solely
interested in that motion, Mercedes de Leon has joined Ghezzi in this
appeal.

The administration of Butler’s estate granted in New York was the principal or domiciliary administration (Johnannes vs.
Harvey, 43 Phil. 175), while the administration taken out in the
Philippines is ancillary. However, the distinction serves only to
distinguish one administration from the other, for the two proceedings
are separate and independent. (34 C. J. S. 1232, 1233 )

The
important thing to inquire into is the Manila court’s authority with
respect to the assets herein involved. The general rule universally
recognized is that administration extends only to the assets of a
decedent found within the state or country where it was granted, so
that an administrator appointed in one state or country has no power
over property in another state or country. (Keenan vs. Toury, 132 A.L.R. 1362; Nash vs. Benari, 3 A.L.R. 61; Michigan Trust Co. vs. Chaffee, 1^9 A.L.R. 1078). This principle is specifically embodied in Section h of Rule 78 of the Rules of Court.

“Estate, how administered.—When
a will is thus allowed, the court shall grant letters testamentary, or
letters of administration with the will annexed, and such letters
testamentary or of administration, shall extend to all the estate of
the testator in the Philippines. Such estate, after the payment of Just
debts and expenses of administration, shall be disposed of according to
such will, so far as such will.may operate upon it; and the residue, if
any, shall be disposed of as is provided bylaw in cases of estates in
the Philippines belonging to persons who are inhabitants of another
state or country.11

It is manifest from the
facts before set out that the funds in question are outside the
jurisdiction of the probate court of Manila. Having been invested in an
annuity in Canada under a contract executed in that country, Canada is
the situs of the money. The party whose appearance the appellant seeks
is only a branch or agency of the company which holds the funds in its
possession, the agency’s intervention being limited to delivering to
the annuitant the checks made out and issued from the home office.
There is no showing or allegation that the funds have been transferred
or removed to the Manila Branch.

Even if the money were in
the hands of the Manila Branch, yet it no longer forms part of Butler’s
estate and is beyond the control of the court. It has passed completely
into the hands of the company in virtue of a contract duly authorized
and validly executed. Whether considered as a trust or as simple
consideration for the company’s assumed obligation, which it has been
religiously performing, of paying periodical allowances to the
annuitant, the proceeds of the sale can not be withdrawn without the
consent of the company, except, upon the death of the annuitant, the
residuary legatee may claim the remainder, if there be any. Heifer the
domiciliary or ancillary executor of Butler’s will, nor the’ trustee,
nor the annuitant has disposition of any of these funds beyond the
amounts and except upon the conditions agreed upon in the contract for
annuity.

In the third place, the power of the court to cite
a person for the purpose stated in the administratrix motion is
defined in Section 7 of Rule 88, which provides a

“Person entrusted with estate render account.—The court, on complaint
of an executor or administrator, may cite a person entrusted by an
executor or administrator with any part of the estate of the deceased
to appear before it, and may require such person to render a full
account, on oath, of the money, goods, chattels, bonds, accounts, or
other papers belonging to such estate as came to his possession in
trust for such executor or administrator, and of his proceedings
thereon; and if the person so cited refuses to appear to render such
account, the court may punish him for contempt as having disobeyed a
lawful order of the court.”

The appellant
administratrix did not entrust to the appellee the money she wants the
latter to account for, nor did the said money come to the appellee’s
possession in trust fof the administratrix. In other words, the
administratrix is a complete stranger to the subject of the motion and
to the appellee. There being no creditors, the only object of the
motion, we incline to believe, is to enable Mercedes de Leon to get the
legacy in a lump sum in complete disregard of the wishes of the
testator, who showed deep concern for her welfare, and of the annuity
contract which the annuitant herself applied for in conjunction with
the trustee.

All in all, from every standpoint, including
that of the annuitant’s financial well-being, the motion and the appeal
are utterly groundless and ill-advised.

The appealed order therefore is affirmed.with costs against the appellants.

Paras, C. J., Feria, Pablo, Bengzon, Padilla, Reyes, Jugo and Bautista Angelo JJ., concur.