JULIETA TAMBUNTING DE TENGCO, PETITIONER, VS. HONORABLE RAMON R. SAN JOSE, AS JUDGE OF FIRST INSTANCE OF MANILA, SALVADOR BARRIOS, JOSE S. SARTE AND EDUARDO D. GUTIERREZ, RESPON…

Clara Tambunting died on April 2, 1950, leaving properties, real and
personal, of, great value. Her will was probated on August 21, 1950. Survived by
her husband Vicente L. Legarda, she left as sole and direct heir her grandson
Vicente Legarda Price, an only child of, her only child and daughter Clarita
Tambunting married to Walter Scott Price. Clarita died during the Liberation in
1945; her surviving spouse Walter Scott Price later remarried and returned to
the United States. His sister Pacifica Price de Barrios married to a brother of
Atty. Salvador Barrios was later appointed guardian of the minor Vicente Legarda
Price who by now must be around ten or eleven years old. Clara’s will disposed
of her estate in the following manner:

1. 4/6 to her grandson Vicente Legarda Price;
2. 1/6 to her husband Vicente L. Legarda (who later married a daughter of Atty.
   Jose S. Sarte); and
3. 1/6 to her nephews and nieces named Banjamin, Augusto, Romeo and Julieta,
   all surnamed Tambunting, children of her brother Manuel Tambunting.

Three co-administrators were appointed—Vicente L. Legarda, represented by his
father-in-law Atty. Sarte; Pacifica Price de Barrios, represented by her
brother-in-law Atty. Barrios; and Augusto Tambunting, represented by Atty.
Eduardo D. Gutierrez. Each co-administrator filed a bond in the sum of P10,000.
At the time the estate was valued at P200,000.

By order of the probate court of October 14, 1950 for payment of the fees of
said three attorneys Barrios, Sarte and Gutierrez, Judge Pecson authorized them
to collect from the estate P50,000, P25,000, and P25,000, respectively. This
order was based on an omnibus petition filed by all the heirs, co-administrators
and their attorneys asking for said payment and informing the court that the
estate was actually worth P3,000,000.

Walter Scott Price, father of the minor Vicente Legarda Price was also given
a legacy in the sum of P25,000 on condition that he relinquished the
administration of the estate. He evidently accepted the condition and he was
paid the amount of the legacy. It should be stated in this connection that each
of the co-administrators was awarded” by the court a fee of P30,000 and the
total award of P90,000 seems to have also been paid to said
co-administrators.

On June 15, 1951, Attys. Sarte and Gutierrez filed a joint petition asking
the probate court that their authorized attorney’s fees of P25,000 each be
equalized to that of Atty. Barrios which was P50,000. Pacifica Price,
co-administrator and her counsel Atty. Barrios opposed the petition but later
withdrew their opposition provided that the additional fees of P25,000 each
sought by Attys. Sarte and Gutierrez be paid from the share of their clients,
namely, Benjamin, Augusto, Romeo and Julieta, represented by Atty. Gutierrez and
Vicente L. Legarda represented Atty. Sarte. Because of the conformity of the
parties this petition for increase was granted by the probate court, and to be
paid from the estate, but with the understanding that the fee of P50,000 given
to Atty. Barrios and the fees of Attys. Sarte and Gutierrez of P25,000 each plus
the additional P25,000 to each should be the limit to the amounts of attorney’s
fees chargeable to the estate, and that any additional attorney’s fees sought
and awarded should come from the estate of their respective clients and with the
consent of the latter.

The probate court was informed that the estate had around Pl,000,000 in cash
deposited in Philippine and United States Banks from which the attorney’s fees
already mentioned could be paid, and cash advances to the heirs and legatees
could be made. From the record we gather that these funds were withdrawn from
the banks and were presumably distributed and paid out roughly as follows:

Partial distribution:
To Vicente Legarda Price, minor ……………………….	P250,000.00
To Vicente Legarda, surviving spouse ………………..	225,000.00
To children of Manuel Tambunting, named Benjamin, Augusto, Romeo and Julieta……………………	185,000.00
To legatees enumerated in the will in different amounts …………………………………………………….	49,000.00
Legacy to Walter Scott Price, father of minor Vicente Legarda Price provided he relinquished administration of the estate …	25,000.00
Paid to variuos creditors………………………………………..	7,168.95
Administration fees, 3 per cent of value of estate or 1 per cent to each co-administrator, per order of October 6, 1950. (Certainty of payment does not appear in the record.)……………………………………………………….	90,000.00
Attorney’s fees, P50,000.00 to each attorney of each co-administrator, as of the order of February 3, 1951 …………	150,000.00
Total ……………………………………………………….	P981,168.95

On January 16, 1951, Atty. Gutierrez filed a proof of claim for P30,000 “for
study, preparation and drawing of the last will and testament” of Clara
Tambunting which will is said to consist of only three pages. The amount claimed
was based on the alleged value of the estate, namely, P3,000,000 that is to say,
1% thereof.

On February 6, 1952, an omnibus petition filed by all the heirs, principal
legatees and co-administrators and their attorneys was filed asking the court to
fix and approve the cash value of the usufruct of the surviving spouse Vicente
L. Legarda in the amount of P50,000; to pay an additional attorney’s fees to the
three lawyers Sarte, Barrios and Gutierrez in the amount of P100,000 each; to
pay an account of said additional attorney’s fees the sum of P20,000,000 to each
attorney and that in order to pay said amounts of P50,000, cash value of the
usufruct, P60,000 advance to the attorneys and P50,000 as partial payment of the
taxes to the Government, the three co-administrators be authorized to procure a
loan from the trust funds deposited in the name of Vicente Legarda Price in the
amount of P160,000.

In an order dated February 39, 1952, Judge San Jose denied the prayer for
authority to secure a loan; denied the prayer for the payment of additional
attorney’s fees in the amount of P100,000 each, but approved the agreement of
the parties fixing the cash value of the usufruct of Vicente L. Legarda in the
sum of P50,000. This amount was paid to Vicente Legarda and is included in the
P225,000 paid to him according to the partial distribution already stated. In
the same order Judge San Jose directed the administrators to wind up the probate
proceedings within 30 days.

In an omnibus petition dated March 20, 1952 filed by the heirs,
co-administrators and their attorneys, the reconsideration of the order of Judge
San Jose of February 29, 1952, was asked, alleging as an important ground for
said reconsideration the assertion and claim that the estate may be
conservatively valued at P7,000,000.

By order of April 9, 1952 Judge Ibaiiez, apparently acting as vacation Judge
in the sala of Judge San Jose, granted in part the motion for reconsideration
and allowed each of the three attorneys an additional fee of P70,000 instead of
P100,000 as previously sought, and that instead of the P20,000 desired to be
advanced to each attorney on account of the P70,000 increase in fees, only
P17,500 be paid each attorney. This order of April 9,1952, granting the
petition for the payment of P70,000 additional fee to each attorney is one of
the orders involved in the present case before this Court.

In a petition dated November 25, 1952, Atty. Gutierrez reminded the probate
court of his previous petition of January 15, 1951 claiming the sum of P30,000
for drawing up the will of Clara Tambunting and of the omnibus petition filed by
the heirs, administrators and their attorneys agreeing to said claim. In an
order dated November 26, 1952, Judge San Jose granted said claim for
P30,000. This is the other order involved in the present petition for
mandamus.

On December 2, 1952 Julieta Tambunting dismissed Atty. Gutierrez as her
lawyer and employed the law firm of Ozaeta, Roxas, Lichauco & Picazo who
filed their appearance on the same date.

Presumably, because of the claims and representations made by the three
attorneys Sarte, Barrios and Gutierrez that the estate had a conservative value
of P7,000,000, the Government on April 27, 1953, filed a claim for taxes, estate
and inheritance, including surcharges, in the amount of P1,581,671.80, based
apparently on the value of the estate as stated in the petition for increase of
attorney’s fees dated January 31, 1952. Subsequently, however, his claim of the
Government for taxes was reconsidered presumably upon representation of the
co-administrators and attorneys that the estate was worth much less than
P70,000,000 and the Government accordingly reduced its claim for taxes from
P1,581,671.80 to P493,734.26, and from this latter amount one may estimate the
actual value of the estate at between two and two and a half million pesos.

On August 14, 1953, Julieta Tambunting thru her new attorneys petitioned the
probate court to set aside its order of April 9,1952, granting to each of three
respondent attorneys P70,000 as additional attorney’s fees and its order of
November 26, 1952, granting to Atty. Gutierrez a separate fee of P30,000 for
preparing the will of Clara Tambunting, all on the ground that the said fees
were procured through fraudulent misrepresentation that the value of the estate
was P7,000,000 when in fact said attorneys knew it to be only two million pesos,
this, with the collusion of the administrators and their respective attorneys,
to the prejudice of the estate especially of the minor Vicente Legarda Price
under the guardianship of one of the co-administrators. In its order of December
28, 1953 Judge San Jose denied said petition apparently on the ground that it
was filed out of time, well beyond the period fixed by Rule 38 of the Rules of
Court relative to petitions for relief; he also denied a motion for
reconsideration of this order of denial.

On April 20, 1954, petitioner Julieta Tambunting filed a notice of appeal and
an appeal bond and the record on appeal, but respondent Judge San Jose in his
order of August 27, 1954, denied the appeal. Because of that order denying the
appeal, Julieta Tambunting filed the present petition for mandamus against Judge
San Jose and attorneys Barrios, Sarte and Gutierrez, to compel the former to
approve and certify to this Court the record on appeal presented by petitioner
on April 20, 1954.

The reason given by respondent Judge in his order of August 27, 1954 refusing
to give due course to the appeal is that his order of December 28. 1953 sought
to be appealed did not constitute a final ‘determination of the rights of
petitioner Julieta with respect to the orders of April 9, 1952 and November 26,
1952 for the reason that she had an adequate remedy granted to her by law,
namely, a separate action to annul said two orders on the ground of fraud, if
filed within four years after the discovery of the fraud. We believe that the
order of December 28, 1953, denying the petition of August 14, 1953 on the
ground that ft was filed beyond the period required by Rule 38, is appealable
(Paner vs. Yatco,^[*] G. R. No.
L-2042, 48 Off. Gaz., No. 1, p. 59). Being appealable, the lower court may not
deny the appeal if perfected on’time as apparently it was so perfected. Even
assuming for a moment that it was a mere interlocutory order, as claimed by
respondents and so not appealable under Rule 41, Section 2 of the Rules of
Court, nevertheless, it has been held in the case of Dais vs. Garduño,
49 Phil., 169, that this rule is not applicable to probate proceedings.

But the lower court says that the order sought to be appealed did not
constitute a final determination of the rights of petitioner with respect to the
two orders sought to be set aside. We do not agree. If not appealed, then there
was nothing to stop or prevent the probate court from enforcing and carrying out
the terms of the two orders in question and paying out the large sums involved
in them. In other words, within the probate proceedings, the order of December
28, 1953, would constitute a final determination of the rights of
appellant-petitioner with respect to the payment of said sums, thereby coming
within the purview of Rule 105, section 1(e) which provides that an
interested person may appeal in special proceedings from an order or judgment
rendered by a Court of First Instance, where such order or judgment:

“Constitutes, in proceedings relating to the settlement of the estate of a
deceased person, or the administration of a trustee or guardian, a final
determination in the lower court of the rights of the party appealing, except
that no appeal shall be allowed from the appointment of a special
administrator.”

The lower court further claims that appellant had another adequate remedy
granted to her by law, namely, a separate action to annul said two orders on the
ground of fraud. But why compel appellant to resort to another remedy, assuming
that it was available, when the remedy by appeal which she is now invoking is
not only adequate but the most speedy, convenient and least expensive? Moreover,
the adequate remedy referred to by the probate court meant filing a separate
action not before the same probate court but before the regular Court of First
Instance, perhaps presided over by another judge who would have no knowledge
whatsoever of the facts and circumstances involved in the probate proceedings,
particularly those surrounding the issuance of the two orders in question. Aside
from the pleadings required in said separate action, evidence would have to be
presented, and by the time that the separate action is finally terminated, not
excluding appeal by the party dissatisfied with the decision of the lower court,
the remedy sought may prove to be too late and empty because the sums whose
disbursement was sought to be stopped and prevented, may in the meantime have
been paid, and spent by the payees, thereby rendering recovery difficult, if not
impossible.

After a probate case is definitely closed, then is the time to consider a
separate action to set aside an order or judgment of the probate court, this, in
order not to reopen the probate proceedings already terminated. But while the
probate proceedings are still open, then the logical tribunal called upon to
consider and grant the remedy is the probate court itself.

One would naturally inquire into and it is necessary to ascertain the nature
and status of the two orders in question dated April 9, 1952 and November 26,
1952, granting attorney’s fees, and whether or not they were such orders or
judgments which were covered by Rule 38 of the Rules of Court regarding
petitions for relief. Rule 38, particularly sections 2 and 3 thereof refer to
orders and judgments which have become final or executory. Do the two orders
aforementioned come under this category?

We believe and hold that the two orders in question granting attorney’s fees
are merely incidental to the probate proceedings and may be regarded as
interlocutory in nature, subject to modification or setting aside by the probate
court until the proceedings are terminated and the case definitely closed, after
which said orders become final and executory. As a rule, during the pendency of
special proceedings, the probate court retains control and jurisdiction over
incidents connected with it, including its orders not affecting third parties
who may by such orders, have acquired vested rights. This control and
jurisdiction is particularly extensive to and effective against its own
officers, such as administrators appointed by it, and attorneys representing
them or representing parties included in the preceedings. As this Court has said
in the case of Onas vs. Javillo, 54 Phil. 604, “In probate proceedings
considerable latitude is allowed a Court of First Instance in modifying or
revoking its own orders as long as the proceedings are pending in the same Court
and timely application or motions for such modifications or revocations are made
by the interested parties.” Just as the probate court may increase as it had
increased the fees of the attorneys in the present case, it could equally and
with the same authority decrease said attorney’s fees when so warranted, as for
instance, if it is found that the value of the estate is much less than what was
originally assessed, and on which erroneous assessment, the original fees were
awarded. The same thing is true with regards to fees to be allowed
administrators. In other words, an order fixing the fees of an administrator or
of an attorney rendering professional services to an administrator, continues to
be under the control of the probate court until the case is closed, and until
then, the court may modify or set it aside in the sense that it may decrease or
increase the same accordingly to the facts and circumstances as they develop and
unfold in the course of the probate proceedings; and even if said fees have
already been partially or fully paid, they may yet be ordered returned or
reimbursed to the estate, or a bond may be required of the court officer
receiving them, to guarantee the return or reimbursement if later found to be
necessary (Dais vs. Carduño, 49 Phil., 165). Respondent Judge therefore
erred in denying the petition of Julieta Tambunting dated August 14, 1953 to set
aside the two orders of April 9, 1952 and November 26, 1952, in the mistaken
belief that said orders had become final and executory and so came under the
provisions of Rule 38, and because the petition for relief was filed beyond the
period prescribed by said Rule 38.

In this connection, it may be stated that we have carefully gone over the
record, particularly the different fees awarded to the rather numerous court
officers intervening in these probate proceedings, and we cannot get away from
the impression that the estate cannot be said to have been administered
economically. For instance, we are not convinced that it was necessary to have
three co-administrators to administer the estate, and each of them being paid
P30,000, and on top of that to have each co-administrator represented by a
separate attorney who, excluding the P70,000 additional fees now in question,
have already been granted and paid P50,000 each. This does not seem to be a case
involving much if any litigation, or of numerous claims or complicated accounts.
So far, the amount paid to creditors is only about seven thousand pesos. There
are no children or heirs of several marriages, with conflicting and adverse
interests which should be represented and protected by perhaps separate
administrators and counsel. There is only one forced and direct heir and a minor
at that. The rest are legatees whose rights, and interests can have no possible,
much less serious conflict with those of the direct heir. True, most of the
awards and grants of fees to the court officers intervening were based on
omnibus petitions and bolstered by the conformity of the co-administrators, the
heirs, legatees, and the attorneys themselves, but one might consider the
special relationship between the heirs, legatees, co-administrators and their
attorneys. As already stated, as co-administrator Vicente Legarda is represented
by Atty. Sarte, his father-in-law; co-administratrix Pacifica Price Barrios is
represented by Atty. Barrios, her brother-in-law; and as to the minor Vicente
Legarda Price now about 10 or 11 years old, he could have been represented by
his own father Walter Scott Price his natural guardian but said father after
being given a legacy of P25,000 had left the Islands and remarried. The minor
could also have been under the guardianship of his grandfather Vicente Legarda
but the latter has also remarried and as already said, in his capacity as
co-administrator, has engaged as his lawyer his father-in-law. So, the minor is
now under the guardianship of his aunt Pacifica Price Barrios but she is also
married and in her capacity as co-administratrix, has engaged as her counsel her
brother-in-law Atty. Barrios. Considering this special relationships above
referred to, which may have the effect of divided loyalty, the omnibus petition
agreed to by the legatees, heirs, co-administrators and their attorneys would
appear not to have the weight and merit usually accorded such petitions,
especially when we bear in mind that the conformity to such omnibus petitions on
the part of the minor Vicente Legarda Price, was given not by him personally for
he was only about nine or ten years old, but by guardian Pacifica Price de
Barrios. Another point not to be lost sight of is that inasmuch as the minor is
entitled to 4/5 or 2/3 of the whole estate, naturally, for every amount
disbursed as attorney’s fees and co-administrators fees, he would have to bear
2/3 of the same. By these observations, it is neither our intention nor our
desire to prejudge the merits of the case as regards the propriety or
reasonableness of the two orders of April 9, 1952 and November 26, 1952,
granting attorney’s fees, which will eventually and in due time, be considered
and passed upon by the proper court.

We may add that in probate proceedings the probate court acts as a trustee of
the estate and as such trustee it should jealously guard the estate under
administration (Dariano vs. Fidalgo, 14 Phil., 67) and see to it that
it is wisely and economically administered and not dissipated. In the case of
Mendoza vs. Pacheco, 64 Phil., 142, this Court said:

“* * * This state fails wretchedly in its duty to its citizens if the
machinery furnished by it for the division and distribution of the property of a
decedent is so cumbersome, unwieldy and expensive that a considerable portion of
the estate is absorbed in the process of such division. Where administration is
necessary, it ought to be accomplished quickly and at very small expense; and a
system which consumes any considerable portion of the property which it was
designated to distribute is a failure. * * * . (McMicking vs. Sy
Conbieng, 21 Phil., 211, 220)”

Here, although the estate was originally valued at P200,000 the assessment
was later raised to P3,000,000 and still later to P7,000,000, and it seems that
the fees of the court officials intervening here were based on this apparently
inflated valuation. The three lawyers would appear to have already been paid a
total of P202,500, and under existing orders of the probate court, they still
have P187,500 coming to them or a total of P390,000. This does not include the
P90,000 already paid to the three co-administrators, all of which would give a
grand total of P480,000. And yet the probate court proceedings are not yet
terminated. Another thing, up to the present, it seems that nothing has been
paid for taxes; and although the tax assessment of the Bureau of Internal
Revenue has been reduced from P1,581,671.80 to P493,734.26, the latter sum
includes surcharges and penalties which otherwise would not have been incurred
had the taxes been paid on time. We repeat that it is the duty of the probate
court to jealously guard the estate and see to it that it is administered wisely
and economically and also see to it that the expense incurred in the
administration, including the fees of the administrators and the attorneys are
commensurate with the actual value of the estate and the extent and value of the
services rendered, so that at the end of the proceedings the bulk and the
greater portion of the estate will remain, to be distributed among those
entitled to the same.

As already stated, the present petition for mandamus was presented for the
purpose of compelling the respondent Judge to give due course to the appeal of
petitioner. We agree with petitioner that she has a right to appeal from the
order denying her petition to set aside the orders of April 9, 1952 and November
26, 1952. By merely granting the petition for mandamus, the appeal would be
given due course and when the case is elevated to us on appeal, the question or
questions to be submitted and discussed would revolve around the nature of said
two orders of April 9 and November 26, whether they had become final and
executory and therefore beyond the power of the probate court to amend or to set
aside, even under a petition for relief under Rule 38, for the reason that said
petition was filed beyond the period prescribed by said rule, or whether said
two orders may be considered as merely incidental in the special proceedings and
consequently, interlocutory in nature, subject to the control of the probate
court until the case is finally closed, during which time they may be amended or
set aside. This same questions were exhaustively presented and discussed by
counsel for both parties and we have carefully considered and passed upon them,
our opinion and ruling being that said orders are interlocutory in character and
may be modified or even set aside by the probate court when so warranted. For
this reason, we have decided in the interest of justice, and to save time,
expense and labor to the parties, and avoid further expense to the estate, and
also so as not to unduly prolong these probate proceedings, to dispense with the
appeal and to consider the present petition as one for certiorari to set aside
and annul the order of the probate court of December 28, 1953 denying the
petition to set aside the two orders in question, solely on the ground that it
was filed out of time.

In view of the foregoing, not only the order of the probate court dated
August 27, 1954 denying the appeal is set aside but also its order of December
28, 1953, and respondent Judge is directed to consider and pass upon the
petition of August 14, 1953, anew and on its merits. It is also suggested that
respondent Judge examine and review the whole proceedings from the beginning to
determine whether the expenses incurred in the administration, including the
awards of the different amounts to the co-administrators and the attorneys were
warranted, and if not, to fix the amounts which in its opinion are reasonable
and proper considering the real and actual value of the estate, the extent and
value of the services rendered, etc. and take whatever action is necessary. No
costs.

Bengzon, Acting C.J., Padilla, Reyes, A., Jugo, Bautista Angelo,
Labrador and Reyes, J.B.L., JJ., concur.

Orders set aside.

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^[*] 87 Phil., 271.